Economics MCQs

Page No. 371

International trade tends to cause welfare losses to at least some groups in a country ?


aThe less mobile the country’s resources


bThe more mobile the country’s resources


cThe lower the country’s initial living standard


dThe higher the country’s initial living standard



Free traders maintain that an open economy is advantageous is that it provides all of the following except ?


a Increased competition for world producers


bA wider selection of products for consumers


cThe utilization of the most efficient production methods


dRelatively high wages levels for all domestic workers



For the United states, exports plus imports are about _____ of its gross national product?


a5 percent


b10 percent


c 25 percent


d55 percent


View Answer 25 percent

The largest amount of trade with the United States in recent years has been conducted by ?


aCanada


bGermany


cMexico


dUnited Kingdom


View Answer Canada

Arguments for free trade are sometimes disregarded by politicians because ?


aMaximizing domestic efficiency is not considered imports


bMaximizing consumer welfare may not be a chief priority


cThere exist sound economic reasons for keeping one’s economy isolated from other economies


dEconomists tend to favor high protected domestic markets



The movement to free international trade is most likely to generate short-term unemployment in which industries ?


a Industries in which there are neither imports nor exports


bImports competing industries


cIndustries that sell to domestic and foreign buyers


dIndustries that sell to only foreign buyers



If a nation has an open economy it means that the nation ?


a Allows private ownership of capital


bHas flexible exchange rates


cHas fixed exchange rates


dconducts trade with other countries



A main advantage of specialization results from ?


aEconomies of large-scale production


b The specializing country behaving as a monopoly


cSmaller production runs resulting in lower unit costs


dHigh wages paid to foreign workers



If a country has a burden of debt it cannot sustain it can ?


areschedule debt


bget a loan from an international organization


cdefault on the loan


d any of the above


View Answer any of the above

Import substitution is the replacement of ____ by domestic production _____ protection of ________?


aexports, subsidies


bexports, patents


cimports, high tariffs or import quotas


dimports, subsidies



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