1.

What country was the world’s largest exporter of goods in 2012?

A)

China

B)

Germany

C)

the United States

D)

Japan

Ans:  A     Difficulty:  Easy     Section:  Introduction     Skill Descriptor:  Fact-Based     Topic:  Introduction

2.

Which of the following is a trade flow?

A)

Robert Feenstra purchases $100 million of British treasury bonds.

B)

Robert Feenstra purchases a yogurt factory in France.

C)

Neither of Robert Feenstra’s purchases is considered a trade flow.

D)

Both of Robert Feenstra’s purchases are considered trade flows.

Ans:  C     Difficulty:  Easy     Section:  Introduction     Skill Descriptor:  Definitional     Topic:  Introduction

3.

Currently, which of the following countries is the world’s largest exporter of goods (in dollar volume)?

A)

China

B)

the United States

C)

Japan

D)

Germany

Ans:  A     Difficulty:  Moderate     Section:  Introduction     Skill Descriptor:  Fact-Based     Topic:  Introduction

4.

Currently, which of the following countries is the world’s largest exporter of goods and services (in dollar volume)?

A)

China

B)

the United States

C)

Japan

D)

Germany

Ans:  B     Difficulty:  Moderate     Section:  Introduction     Skill Descriptor:  Fact-Based     Topic:  Introduction

5.

What is the term for a capital flow that is used to purchase or build a tangible asset like a factory?

A)

migration

B)

service exports

C)

service imports

D)

foreign direct investment

Ans:  D     Difficulty:  Easy     Section:  Introduction     Skill Descriptor:  Definitional     Topic:  Introduction

6.

When a foreign resident purchases a good or service from someone in the United States, the transaction is:

A)

a U.S. export.

B)

a U.S. import.

C)

bilateral exchange.

D)

a compensating differential.

Ans:  A     Difficulty:  Easy     Section:  International Trade     Skill Descriptor:  Definitional     Topic:  The Basics of World Trade

7.

Imports are:

A)

goods or services purchased from a foreign resident.

B)

goods or services sold to foreign residents.

C)

goods only purchased from foreigners—you cannot purchase services from foreigners.

D)

services only—imports do not include goods.

Ans:  A     Difficulty:  Easy     Section:  International Trade     Skill Descriptor:  Definitional     Topic:  The Basics of World Trade