ECON 312 Week 7 Quiz Solutions

ECON 312 Principles of Economics

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Version 1
1. (TCO 8) Specialization and trade between individuals or between nations lead to:
2. (TCO 8) Suppose the United States sets a limit on the number of tons of sugar that can be
imported each year. This is an example of a(n)
3. (TCO 9) Which of the following is not included in the current account of a nation's
balance of payments?
4. (TCO 9) If the dollar price of the yen rises, then
5. (TCO 9) In recent years, the United States has had large
6. (TCO 9) Answer the next question(s) on the basis of the following table which indicates
the dollar price of libras, the currency used in the hypothetical nation of Libra. Assume
that a system of freely floating exchange rates is in place.
7. (TCO 8) The primary gain from international trade is
8. (TCO 8) Refer to the graphs below. Stanville has a comparative advantage in producing
9. (TCO 9) The Group of Eight (G8) Nations which periodically have jointly intervened to
influence the value of the dollar include
10. (TCO 8) As a percentage of GDP, U.S. exports are
11. (TCO 8 and 10) Explain some of problems with the argument that trade protection is
needed to protect American jobs.
12. (TCO 9) What are the economic effects of a depreciation of the US dollar on US trade
balances?
Version 2
1. (TCO 8) The United States' most important trading partner quantitatively is
2. (TCO 8) Suppose the United States sets a limit on the number of tons of sugar that can be
imported each year. This is an example of a(n)
3. (TCO 9) Which of the following is not included in the current account of a nation's
balance of payments?
4. (TCO 9) If the dollar price of the yen rises, then
5. (TCO 9) In terms of individual nations, the largest U.S. trade deficit is with
6. (TCO 9) Answer the next question(s) on the basis of the following table which indicates
the dollar price of libras, the currency used in the hypothetical nation of Libra. Assume
that a system of freely floating exchange rates is in place.
7. (TCO 8) Other things equal, economists would prefer
8. (TCO 8) Refer to the graphs below. Stanville has a comparative advantage in producing
9. (TCO 9) Suppose the G8 Nations decide that the dollar is too strong (high in value)
relative to the yen. These nations might
10. (TCO 8) Which country has the largest share of total world exports?
11. (TCO 8 and 10) Evaluate this argument for a trade barrier: “The U.S. needs protection
from cheap foreign labor.” Include some reasons why this might be an invalid statement.
12. (TCO 9) What effect might the depreciation of the U.S. dollar relative to the Japanese
yen have on imports and exports to and from each country?

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