Test Bank For Global Economics International Edition 13th Edition by Robert J. Carbaugh

CHAPTER 1—THE INTERNATIONAL ECONOMY AND GLOBALIZATION

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

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: A PTS: 1

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: D PTS: 1