International Economics International Edition 14th Edition by Robert Carbaugh – Test Bank
MULTIPLE CHOICE
1.A primary reason why nations conduct international trade is because:
|
a. |
Some nations prefer to produce one thing while others produce other things |
|
b. |
Resources are not equally distributed among all trading nations |
|
c. |
Trade enhances opportunities to accumulate profits |
|
d. |
Interest rates are not identical in all trading nations |
ANS: B PTS: 1 DIF: Easy NAT: BUSPROG: Analytic
TOP: Globalization of Economic Activity KEY: BLOOM’S: Knowledge
2.A main advantage of specialization results from:
|
a. |
Economies of large-scale production |
|
b. |
The specializing country behaving as a monopoly |
|
c. |
Smaller production runs resulting in lower unit costs |
|
d. |
High wages paid to foreign workers |
ANS:APTS:1DIF:Moderate
NAT: BUSPROG: Reflective Thinking TOP: Why is Globalization Important?
KEY: BLOOM’S: Comprehension
3.International trade in goods and services is sometimes used as a substitute for all of the following except:
|
a. |
International movements of capital |
|
b. |
International movements of labor |
|
c. |
Domestic production of the same goods and services |
|
d. |
Domestic production of different goods and services |
ANS:DPTS:1DIF:Challenging
NAT: BUSPROG: Reflective Thinking TOP: Globalization of Economic Activity
KEY: BLOOM’S: Comprehension
4.If a nation has an open economy, it means that the nation:
|
a. |
Allows private ownership of capital |
|
b. |
Has flexible exchange rates |
|
c. |
Has fixed exchange rates |
|
d. |
Conducts trade with other countries |
ANS:DPTS:1DIF:Easy
NAT: BUSPROG: Reflective Thinking TOP: The United States in an Open Economy
KEY: BLOOM’S: Comprehension
5.International trade forces domestic firms to become more competitive in terms of:
|
a. |
The introduction of new products |
|
b. |
Product design and quality |
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c. |
Product price |
|
d. |
All of the above |
ANS:DPTS:1DIF:Moderate
NAT: BUSPROG: Reflective Thinking TOP: The United States in an Open Economy
KEY: BLOOM’S: Comprehension
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