International Economics
Chapter Exam Questions
Course Introduction
International Economics explores the fundamental principles and theories governing the flow of goods, services, and capital across national borders. The course examines the causes and consequences of international trade, international financial markets, exchange rate determination, and the role of international economic institutions. Students analyze the impact of trade policies, economic integration, and globalization on national economies and global welfare, while also considering the influence of political, social, and technological changes on international economic relations. Through case studies and current events, the course develops analytical tools and critical perspectives necessary for understanding contemporary issues in the global economy.
Recommended Textbook
International Finance Theory and Policy 10th Edition by Paul R. Krugman
Available Study Resources on Quizplus
12 Chapters
706 Verified Questions
706 Flashcards
Source URL: https://quizplus.com/study-set/1029
Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/20417
Sample Questions
Q1) International monetary analysis focuses on
A) the real side of the international economy.
B) the international trade side of the international economy.
C) the international investment side of the international economy.
D) the issues of international cooperation between Central Banks.
E) the monetary side of the international economy, such as currency exchange.
Answer: E
Q2) In 1999,demonstrators representing a mix of traditional and new ideologies disrupted a major international trade meeting in Seattle of
A) the OECD.
B) NAFTA.
C) the WTO.
D) GATT.
E) the G8.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: National Income Accounting and the Balance of Payments
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/20428
Sample Questions
Q1) The position of the United States current account balance in 2009 was
A) lent over 6 percent of its GNP, resulting in a large current account surplus.
B) borrowed over 9 percent of its GNP, leading to a large current account deficit.
C) achieved a currant account balance of zero.
D) borrowed over 10 percent of its GNP, leading to a large current account deficit.
E) borrowed less then 5 percent of its GNP, leading to a large current account surplus.
Answer: B
Q2) How can changes in the market price of wealth previously acquired alter a country's net foreign wealth?
Answer: When Japan's stock market lost value in the 1990s,American and European owners of Japanese asset lost value in their claims,while Japan's net foreign wealth increased.Similarly,exchange rate changes can have this effect.When the dollar depreciates against foreign currency,foreigners who hold dollar assets will see their wealth fall when measured in their home currencies.
Q3) What is the national income identity for a closed economy?
Answer: Y = C + I + G
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Labor Productivity and Comparative Advantage:
The Ricardian Model
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/20418
Sample Questions
Q1) If two countries have identical production possibility frontiers,then trade between them is likely to be beneficial if
A) their supply curves are identical.
B) their cost functions are identical.
C) their demand conditions are identical.
D) their incomes are identical.
E) their demand functions differ.
Answer: E
Q2) Given the information in the table above,if the world equilibrium price of widgets were 40 cloths,then
A) both countries could benefit from trade with each other.
B) neither country could benefit from trade with each other.
C) each country will want to export the good in which it enjoys comparative advantage.
D) neither country will want to export the good in which it enjoys comparative advantage.
E) both countries will want to specialize in cloth.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Specific Factors and Income Distribution
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/20419
Sample Questions
Q1) In the specific factors model,the effects of trade on welfare overall are ________ and for fixed factors used to produce the exported good they are ________.
A) positive; positive
B) negative; positive
C) positive; negative
D) ambiguous; positive
E) positive; ambiguous
Q2) International trade can have important effects on the distribution of income because
A) some resources are immobile in the short run.
B) of government corruption.
C) the more powerful country dictates the terms of trade.
D) rich countries take advantage of poor countries.
E) different countries use different currencies.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Resources and Trade: The Heckscher-Ohlin Model
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/20420
Sample Questions
Q1) In the 2-factor,2 good Heckscher-Ohlin model,trade will ________ the owners of a country's ________ factor and will ________ the good that uses that factor intensively.
A) harm; scarce; import
B) harm; abundant; import
C) benefit; scarce; export
D) benefit; scarce; import
E) harm; scarce; export
Q2) Suppose that there are two factors,capital and land,and that the United States is relatively land endowed while the European Union is relatively capital-endowed.According to the Heckscher-Ohlin model
A) European capitalists should support U.S.-European free trade.
B) European landowners should support U.S.-European free trade.
C) all capitalists in both countries should support free trade.
D) all landowners should support free trade.
E) the U.S. should compensate European countries once trade commences.
Q3) Refer to above figure.Would you expect to find that the real wages become equalized in both countries? Explain the reason for any differences you note.
Q4) Why do we observe the Leontief paradox?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Standard Trade Model
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/20421
Sample Questions
Q1) The meaning of "terms of trade" is
A) the price of a country's exports divided by the price of its imports.
B) the amount of exports sold by a country.
C) the price conditions bargained for in international markets.
D) the quantities of imports received in free trade.
E) the tariffs in place between two trading countries.
Q2) An export subsidy will cause the terms of trade of the ________ country to ________ and will ________ the country.
A) exporting; suffer; harm
B) exporting; improve; benefit
C) importing; suffer; harm
D) importing; suffer; benefit
E) importing; improve; harm
Q3) If points A and B are two locations on a country's production possibility frontier,then
A) the country could produce either of the two bundles.
B) consumers are indifferent between the two bundles.
C) producers are indifferent between the two bundles.
D) at any point in time, the country could produce both.
E) both bundles must have the same relative cost.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: External Economies of Scale and the
International Location of Production
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/20422
Sample Questions
Q1) External economies of scale arise when the cost per unit
A) falls as the industry grows larger and rises as the average firm grows larger.
B) rises as the industry grows larger and falls as the average firm grows larger.
C) falls as the industry and the average firm grows larger.
D) remains constant over a broad range of output.
E) rises as the industry and the average firm grows larger.
Q2) Why is it that if an industry is operating under conditions of internal scale economies then the resultant equilibrium cannot be consistent with the pure competition model?
Q3) Internal economies of scale arise when the cost per unit
A) falls as the average firm grows larger.
B) rises as the industry grows larger.
C) falls as the industry grows larger.
D) rises as the average firm grows larger.
E) remains constant over a broad range of output.
Q4) What is meant by an "industrial district" and what are the three main sources of the economic advantages derived from locating in such a district?
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: Firms in the Global Economy: Export
Decisions,Outsourcing,and Multinational Enterprises
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/20423
Sample Questions
Q1) In the model of monopolistic competition,trade costs between countries will cause domestic and foreign markets to have ________ prices,________ quantities sold,and ________ profit levels.
A) different; different; different
B) identical; different; different
C) different; different; identical
D) identical; different; identical
E) identical; identical; different
Q2) International trade based solely on internal scale economies in both countries is likely to be carried out by
A) monopolists in each country.
B) a relatively large number of price competing firms.
C) a relatively small number of price competing firms.
D) a relatively small number of imperfect competitors.
E) a large number of oligopolists in each country.
Q3) The figure above represents the demand and cost functions facing a Brazilian Steel producing monopolist.If it were unable to export,and was constrained by its domestic market,what quantity would it sell at what price?
Q4) What are the consequences of outsourcing production on the welfare of countries?
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: The Instruments of Trade Policy
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/20424
Sample Questions
Q1) The imposition of tariffs on imports results in deadweight (triangle)losses.These are A) production and consumption distortion effects.
B) redistribution effects.
C) revenue effects
D) efficiency effects.
E) distortion of incentives.
Q2) Refer to above figure.In the absence of trade,what is the country's producer surplus?
Q3) An export tariff will ________ producer surplus,________ consumer surplus,________ government revenue,and ________ overall domestic national welfare.
A) increase; decrease; increase; have an ambiguous effect on B) increase; decrease; decrease; decrease
C) increase; decrease; have no effect on; have an ambiguous effect on D) increase; decrease; have no effect on; decrease
E) increase; increase; decrease; have an ambiguous effect on
Q4) Refer to above figure.With a specific tariff of $3 per unit,what is the quantity of Widgets imported?
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: The Political Economy of Trade Policy
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/20425
Sample Questions
Q1) The average tariff rate dutiable imports in the United States is approximately
A) less than 10 % of the value of imports.
B) 15% of the value of imports.
C) 20 % of the value of imports.
D) 25% of the value of imports.
E) more than 30% of the value of imports.
Q2) Under U.S.commercial policy,the escape clause results in
A) temporary quotas granted to firms injured by import competition.
B) tariffs that offset export subsidies granted to foreign producers.
C) a refusal of the U.S. to extradite anyone who escaped political oppression.
D) tax advantages extended to minority-owned exporting firms.
E) tariff advantages extended to certain Caribbean countries in the U.S. market.
Q3) Refer to above figure.Assume that Boeing is the first to enter the Hungarian market.Without a government subsidy what price would they demand,and what would be their total profits?
Q4) Refer to above figure.What is the revenue gain or loss for Europe as a whole (including taxpayers)?
Q5) The U.S.is probably the most open international market among the industrialized countries.What then does the U.S.have to gain by joining the WTO?
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Trade Policy in Developing Countries
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/20426
Sample Questions
Q1) In 2003,the per-capita income in China was roughly ________ of that in the U.S.
A) one hundredth
B) one eighth
C) one half
D) the same as
E) one twentieth
Q2) Refer to above figure.Why would workers not shift from agriculture to manufacturing in the initial situation where wages are higher in the latter?
Q3) An efficient economy would set the marginal product in the traditional sector
A) lower than that in the modern non-traditional sector.
B) higher than that in the modern sophisticated sector.
C) equal to that in the modern sophisticated sector.
D) lower in the relatively capital intensive sector.
E) higher in the relatively capital intensive sector.
Q4) China's recent experience supports the proposition that
A) "economic miracles" are solely to be expected in small countries.
B) central planning and socialism can promote sustained economic growth.
C) a lessening of income disparities is a prerequisite for economic growth.
D) growth in a large country cannot be affected by its foreign sector.
E) policy changed can dramatically prompt export oriented growth
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Controversies in Trade Policy
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/20427
Sample Questions
Q1) When the WTO met in Seattle to initiate a further move towards free international trade,thousands of activists met
A) in order to promote the WTO's goals of "Trade-not Aid."
B) in order to laud the WTO policy orientation which would bust local monopolies and therefore help ordinary relatively poor consumers everywhere.
C) in order to laud the WTO policy of disallowing government sweetheart deals, which typically meant that corrupt governments subsidized their in-laws' conglomerates on the backs of poor taxpayers.
D) in order to support the WTO efforts of bringing about a universal shift of resources in poor countries to higher efficiency and productivity uses, which would raise the real incomes of everyone.
E) in order to protest WTO free trade policies that they believed hurt workers.
Q2) The Brander-Spencer model identified market failure in certain industries due to A) unfair competition.
B) wildcat destructive competition.
C) environmental negative externalities associated with pollution.
D) limited competition.
E) lack of excess returns.
To view all questions and flashcards with answers, click on the resource link above. Page 14