Quiz: Chapter Thirteen

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Written: Nov 9, 2010 7:53 PM - Nov 9, 2010 9:40 PM

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Your quiz has been submitted successfully. Question 1 What is exchanged in the financial sector? Money only. Goods and services. All financial assets. All assets with a money price. View Feedback Question 2 A financial asset is liquid: 1 / 1 point 1 / 1 point

if it can be carried easily from one place to another. if it can be readily exchanged for another asset or good. only if it takes the form of cash. if it is held by the public and earning interest. View Feedback Question 3 The U.S. central bank is a financial institution that: has the sole right to issue currency. sets borrowing and lending in a country. determines what assets will back a currency. View Feedback Question 4 1 / 1 point All of the following are characteristics of money except: it must be difficult to counterfeit. it must be available in unlimited supply. it must be durable. 1 / 1 point

has the sole right to accept deposits and make loans.

it must be divisible. View Feedback Question 5 Which of the following is not one of the functions of money? medium of exchange. unit of account. standard of economic well-being. store of wealth. View Feedback Question 6 In order to function as a medium of exchange, money must: be backed by gold. maintain a constant value over an extended period of time. be backed by some precious commodity. be generally accepted in exchange for goods and services. View Feedback Question 7 1 / 1 point In POW camps during World War II, everything was traded for cigarettes. For example, 1 bar of soap cost 2 cost 4 cigarettes. During the time the POW camps, cigarettes: did not serve as money because their value was not backed by government. did not serve as money because no one controlled the supply of cigarettes. served as money for those who smoked. 1 / 1 point 1 / 1 point

served as money because they served as a unit of account, medium of exchang wealth. View Feedback Question 8 0 / 1 point When money is used to set the value of goods such as cars, DVDs, and TVs, money is medium of exchange. unit of account. store of wealth. unit of wealth. View Feedback Question 9 M1 includes which of the following? 1 / 1 point

Time deposits. Checking account deposits. Gold certificates. Money market mutual funds. View Feedback

Question 10 1 / 1 point The measure of money that best fulfills the medium of exchange function because it is M1. M2. M3. L. View Feedback Question 11 Checking account deposits are classified as money because: they earn interest income for the depositor. they are ultimately obligations of the Treasury. banks hold currency equal to their outstanding deposits. View Feedback Question 12 1 / 1 point The chief difference between the M1 and M2 measures of the money supply is: the supply of M1 exceeds the supply of M2. M2 excludes traveler's checks. M1 is a broader, more comprehensive measure. M2 includes assets with a lower liquidity than those in M1. View Feedback Question 13 When the Fed prints and issues bills, it creates: a financial liability for the holder of the IOU. a financial asset for itself. a real asset. money. View Feedback 1 / 1 point 1 / 1 point

they can be readily used in the making of purchases and the payment of debts.

Question 14 1 / 1 point Early medieval bankers were similar to modern bankers in that: they lend a portion of the deposits. they could not create money. deposits were backed by gold. they were not subject to any regulation. View Feedback Question 15 1 / 1 point The goldsmith's ability to create money was based on the fact that: gold receipts were rarely exchanged for gold. the goldsmith was required to keep 100% gold reserves. consumers preferred to use gold for transactions. withdrawals of gold tended to exceed deposits of gold. View Feedback Question 16 1 / 1 point A commercial bank's reserve ratio equals the ratio of its reserves to its: assets. required reserves. deposits. excess reserves. View Feedback Question 17 Bank reserves are: real assets deposited at banks. cash and deposits a bank keeps on hand or at the central bank. loans issued by banks deposited into checking accounts. checks held by depositors. View Feedback Question 18 The required reserve ratio refers to the ratio of a bank's: liabilities to its net worth. required reserves to its deposits. total reserves to its deposits. 1 / 1 point 1 / 1 point

deposits to its actual reserves. View Feedback

Question 19 1 / 1 point Suppose total deposits in the First Bank of Commerce are $100,000 and required reser Based on this information, the required reserve ratio is: 0.10. 0.9. 1. 10. View Feedback

Question 20 0 / 1 point A bank has a reserve requirement of 10 percent. This means that if a customer deposi bank may lend: $1,000. $9,000. $10,000. $11,000. View Feedback

Question 21 1 / 1 point A bank has a reserve requirement of 0.10. If it has demand deposits of $100,000 and is holding $12,000 in re all the bank's reserves are excess reserves. the bank is not meeting its reserve requirement. the bank is holding $2,000 in excess reserves. all reserves are required reserves. View Feedback Question 22 When a bank makes a loan, the money supply: does not increase. decreases. increases. may increase or decrease depending on how the loan is used. View Feedback Question 23 The organizations that can create money are the: 1 / 1 point 1 / 1 point

government and its agencies. Fed and the banks. mutual funds and retirement funds. households and corporations. View Feedback Question 24 As the reserve ratio goes up, the simple money multiplier goes: up, and more money will be created. down, and less money will be created. up, and less money will be created. down, and more money will be created. View Feedback Question 25 As the reserve ratio goes up, less money will be created because: people will hold less cash. people will hold more cash. banks will extend more loans. banks will extend fewer loans. View Feedback 1 / 1 point 1 / 1 point

Question 26 1 / 1 point If the required reserve ratio is 0.20 and individuals hold no cash, what is the maximum amount of money that million deposit in the banking system? $5 million. $20 million. $25 million. $50 million. View Feedback Question 27 Excess reserves equal: total deposits. total deposits minus required reserves. total reserves. total reserves minus required reserves. 1 / 1 point

View Feedback

Question 28 1 / 1 point Some colleges charge for student parking. Currently, your college does not charge for parking but the admini possible charge of $2 per day. You are not sure when the new parking policy will start; therefore you decide your wallet. You hold cash for the: transactions motive. precautionary motive. speculative motive. impulsive motive. View Feedback

Question 29 1 / 1 point If I am worried about the price of assets such as bonds falling, I may be more inclined to hold money instead. transactions motive. precautionary motive. speculative motive. impulsive motive. View Feedback

Question 30 0 / 1 point The higher the interest rate in the economy, the __________ the quantity of money d lower higher more better View Feedback Attempt Score: 27 / 30 (90.00 %) Overall Grade (highest attempt): 27 / 30 (90.00 %)

Quiz: Chapter Fifteen

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Attempt 1
Written: Nov 15, 2010 12:38 PM - Nov 15, 2010 2:12 PM

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Your quiz has been submitted successfully. Question 1 1 / 1 point Why are financial-sector crises scarier than collapses in other sectors of the economy? The financial sector is the biggest sector. Financial-sector crises happen more often than collapses in other sectors. Most people work in the financial sector. If the financial sector fails, it can bring the whole economy down with it. View Feedback Question 2 1 / 1 point How do companies most commonly pay for raw materials and pay wages? They use their cash reserves. They get loans from the Federal Reserve. They get short-term loans from financial institutions. They issue stock options and use the funds from those. View Feedback Question 3 Which of the following is not a stage of a financial crisis? The forming of an asset bubble. The public announcement by the government of a financial crisis occurring. The bursting of an asset bubble. The collapse of the financial sector. View Feedback 1 / 1 point

Question 4 1 / 1 point Suppose the people in my town hear a rumor that their local bank is in trouble and all rush to withdraw mone referred to as: leverage. a moral hazard problem. a bad precedent problem.

a bank run. View Feedback

Question 5 1 / 1 point When there is unsustainable rapidly rising prices of some type of financial asset, such as stock, we refer to th liquidity trap. bubble. bad-precedent problem. moral-hazard problem. View Feedback

Question 6 1 / 1 point A company borrows money to supplement its current funds and buy more financial assets. This is what referr diversification. leverage. quantitative easing. herding. View Feedback Question 7 1 / 1 point Which of the following was not a direct contributor to the booming housing market in the 2000s? People were expecting housing prices to keep on rising. People could get mortgages with no money down. Lending standards became loose. A fiscal stimulus package was passed in early 2001. View Feedback Question 8 1 / 1 point Suppose my financial adviser tells me to combine different financial assets, whose prices are not expected to effort to reduce risk. This process is known as: liquidity. quantitative easing. diversification. herding. View Feedback Question 9 Buying on "margin" occurs when: banks borrow from the Federal Reserve. 1 / 1 point

people put down payments on purchases of automobiles and houses.

people borrow money from stockbrokers to buy shares they could not afford on people borrow money from banks using their stock as collateral. View Feedback Question 10 If a financial asset is liquid: 1 / 1 point

it is considered to be a safe asset with no chance of being deleveraged. it is an online asset and has no physical piece of paper associated with it. it is a highly desirable asset. it is an asset that can easily be converted into cash. View Feedback Question 11 The 2008 financial crisis was caused largely by: a run on banks and other financial institutions. a bursting of the stock market bubble. a bursting of the housing market bubble. the inability of the government to issue Treasury bonds. View Feedback Question 12 In the 2008 financial crisis, the Fed was: 1 / 1 point 0 / 1 point

less aggressive with monetary policy than it was in the Depression. more aggressive with monetary policy than it was in the Depression. less aggressive with fiscal policy than it was in the Depression. more aggressive with fiscal policy than it was in the Depression. View Feedback Question 13 In the 2008-2009 recession, the Congress was: 1 / 1 point

less aggressive with monetary policy than it was in the Depression. more aggressive with monetary policy than it was in the Depression. was aggressive with fiscal policy than it was in the Depression. more aggressive with fiscal policy than it was in the Depression. View Feedback Question 14 1 / 1 point

Which of the following best describes how the economy recovered from the Great Depression?

The Fed finally started using expansionary monetary policy and the economy qu

The expansionary monetary policy that the Fed had been engaging in throughou started to work. Fiscal policy became extremely expansionary as the US geared up for WWII. View Feedback Question 15 The Glass-Steagall Act was set up to: 1 / 1 point

The economy eventually recovered on its own without any government interven

regulate financial institutions after the Savings and Loan Crisis of the 1980s. give the Federal Government the sole responsibility in carrying out fiscal policy economy. regulate the derivatives market as a result of the 2008 crisis. View Feedback Attempt Score: 14 / 15 (93.33 %) Overall Grade (highest attempt): 14 / 15 (93.33 %)

establish banking regulations and deposit insurance as a result of the 1930s cris

Quiz: Chapter Sixteen

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Written: Nov 23, 2010 5:22 PM - Nov 23, 2010 6:23 PM

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Your quiz has been submitted successfully. Question 1 Inflation hurts: everyone. those whose incomes don't change. those whose incomes can change. no one. View Feedback 1 / 1 point

Question 2 0 / 1 point Suppose workers bargain for a new contract that gives them a 5 percent pay increase over the next year. If the but inflation is in fact 2 percent, inflation makes: both workers and firms worse off. workers worse off and firms better off. workers better off and firms worse off. both workers and firms better off. View Feedback Question 3 Unexpected inflation hurts: lenders. borrowers. both lenders and borrowers. neither lenders nor borrowers. View Feedback 1 / 1 point

Question 4 1 / 1 point Suppose inflation is expected to be 2 percent but it is actually 4 percent. The people who gain from the differ expected inflation are most likely to be the: owners of firms and lenders. owners of firms and borrowers.

workers and lenders. workers and borrowers. View Feedback Question 5 1 / 1 point Rational expectations, strictly speaking, are expectations based on: the predictions of economic models. what has happened in the past. models of human behavior. the continuation of past trends. View Feedback

Question 6 1 / 1 point Suppose inflation in 2007, 2008, and 2009 was 4 percent, 3 percent, and 2 percent, re people use only this information and expect inflation to be 3 percent as a result, then t are best described as: adaptive. rational. extrapolative. imperfect. View Feedback Question 7 0 / 1 point Deflation is a problem for all of the following reasons except it: is often associated with large falls in asset prices.

may prevent a central bank from lowering the real interest rate as much as it w can undermine a country's financial system. can lead to excessive increases in aggregate demand. View Feedback Question 8 The equation of exchange is expressed as: MR = PQ. MV = PQ. MPP = P. MR = MC. View Feedback Question 9 1 / 1 point 1 / 1 point

According to the quantity theory of money, if the money supply increases by 12 percent, then in the long run down by 12 percent. up by less than 12 percent. up by 12 percent. up by more than 12 percent. View Feedback

Question 10 1 / 1 point Suppose that real output is fixed and equal to 400 while velocity is fixed and equal to 5 money supply is equal to 200, the price level will be: 2.5. 5. 7.5. 10. View Feedback

Question 11 1 / 1 point In the fourth quarter of 2008, the velocity of money was about 1.8 and nominal GDP was $14.4 trillion. Appr money supply in the fourth quarter of 2008? $1.8 trillion. $8.0 trillion. $14.4 trillion. We cannot compute the money supply from the data given. View Feedback Question 12 1 / 1 point The quantity theory of money concludes that if real output is constant: changes in the price level are caused by changes in the money supply. real GDP and the money supply are related in the long run. changes in velocity are proportional to changes in nominal income. changes in velocity are proportional to changes in the money supply. View Feedback Question 13 0 / 1 point Which of the following is not one of the assumptions of the quantity theory of money? Velocity is constant. The money growth rate is constant.

Real output is independent of the money supply. Causation goes from money supply to prices. View Feedback Question 14 The inflation tax is: 1 / 1 point

an implicit tax on the holders of cash and the holders of any obligations specifie

an implicit tax on the holders of cash and the holders of any obligations specifie an explicit tax on wealth. an explicit tax on consumption. View Feedback

Question 15 1 / 1 point Annual inflation in Zimbabwe was 32 percent in 1998, 383 percent in 2003, and rose to about 100,000 percen likely cause of this rapid rise of inflation? The central bank is run by people who do not understand the relationship betwe spending. The government wants to transfer wealth from debtors to creditors. The economy is experiencing balance of payments problems.

The government must print money to finance its large deficits because it canno taxes. View Feedback Question 16 0 / 1 point Experiences from different countries suggest that the relationship between money grow straightforward since when money supply increases inflation also increases. straightforward in countries with low inflation.

unclear since there can be a time lag from the moment the money supply grow inflation. View Feedback Question 17 1 / 1 point Economists who believe in the institutionalist theory of inflation argue that: causation in the equation of exchange goes from PQ to MV. causation in the equation of exchange goes from MV to PQ. the equation of exchange is invalid. there is no relationship between PQ and MV.

nonexistent since money growth always promotes output growth instead of infla

View Feedback Question 18 Cost-push inflation occurs when: output is above potential output. output equals potential output. price increases are not related to demand pressures. price increases are related to demand pressures. View Feedback 1 / 1 point

Question 19 0 / 1 point The short-run Phillips curve suggests that an increase in the rate of inflation will accom a decrease in the unemployment rate. an increase in the unemployment rate. an increase in expected inflation. a decrease in expected inflation. View Feedback Question 20 0 / 1 point Empirical evidence led many economists in the 1960s to believe that there was:

no predictable relationship between inflation rates and unemployment rates in t

an unstable direct relationship between inflation rates and unemployment rates economy.

a stable inverse relationship between inflation rates and unemployment rates in View Feedback Question 21 Stagflation is the combination of: 1 / 1 point

a stable direct relationship between inflation rates and unemployment rates in t

high and accelerating inflation and low unemployment. high and accelerating inflation and high unemployment. low and decelerating inflation and high unemployment. low and decelerating inflation and low unemployment. View Feedback Question 22 The long-run Phillips curve is: 0 / 1 point

downward-sloping, implying a trade-off between unemployment and inflation.

downward-sloping, implying that the unemployment rate always returns to its n

long-run. vertical, implying a long-run trade-off between unemployment and inflation. vertical, implying that the unemployment rate always returns to its target rate View Feedback Question 23 If expected inflation increases: the short-run Phillips curve shifts up. the short-run Phillips curve shifts down. the short-run Phillips curve remains unchanged. there is a movement along a short-run Phillips curve. View Feedback Question 24 Inflationary pressures increase when the economy moves: to the right of the long-run Phillips curve. to the left of the long-run Phillips curve. down the short-run Phillips curve. down the long-run Phillips curve. View Feedback Question 25 Supporters of the institutionalist theory of inflation: 1 / 1 point 1 / 1 point 0 / 1 point

do not believe that a little bit of inflation will eventually create much higher leve

believe that high levels of inflation are unavoidable if the government tries to ke at its target rate. believe that there is a long-run trade-off between inflation and growth. View Feedback Attempt Score: 17 / 25 (68.00 %) Overall Grade (highest attempt): 17 / 25 (68.00 %)

believe that price stability should be the most important goal of monetary and f

Quiz: Chapter Seventeen

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Written: Nov 30, 2010 7:08 PM - Nov 30, 2010 9:32 PM

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Your quiz has been submitted successfully. Question 1 When the government runs a deficit, it will: buy bonds to finance the deficit. sell bonds to finance the deficit. reduce the money supply to finance the deficit. raise taxes immediately. View Feedback Question 2 Deficits may be desirable in the short run if they: 1 / 1 point 1 / 1 point

help to stabilize the economy when the economy falls below potential output. increase savings necessary for future investment and growth. increase savings necessary for future consumption and demand. help to stabilize the economy when the economy is above potential output. View Feedback Question 3 A passive deficit is the portion of the deficit that exists when: the economy is at potential income. the economy is beneath potential income. inflation is not fully anticipated. inflation is fully anticipated. View Feedback Question 4 If a passive surplus exists, the economy must be: at potential income. above potential income. 1 / 1 point 1 / 1 point

below potential income. experiencing deflation. View Feedback Question 5 Economists generally are: 1 / 1 point

more concerned about structural deficits than passive deficits. equally concerned about structural and passive deficits. more concerned about passive deficits than structural deficits. not concerned about structural or passive deficits. View Feedback Question 6 1 / 1 point Which of the following will decrease the nominal deficit? An increase in taxes. An increase in government expenditures. An increase in interest rates. An increase in the debt. View Feedback Question 7 1 / 1 point Which of the following statements gives the correct definition of the real deficit? Real deficit = Nominal deficit + (inflation x total debt) Real deficit = Nominal deficit + (total debt/inflation) Real deficit = Nominal deficit - (total debt/inflation) Real deficit = Nominal deficit - (inflation x total debt) View Feedback Question 8 Government debt is defined as: 1 / 1 point

a shortfall of incoming revenue under outgoing payment. a shortfall of outgoing payments under incoming revenue. accumulated deficits minus accumulated surpluses. accumulated deficits plus accumulated surpluses. View Feedback Question 9 1 / 1 point Use the following table to determine which statement is true.

The budget deficit in 1950 was $2.3 billion. From 1946 to 1950, the U.S. debt was $2.3 billion. From 1945 to 1950, the debt rose by $2.3 billion. In 1950, the U.S. debt was $2.3 billion. View Feedback Question 10 Which of the following statements is true? 1 / 1 point

The debt is a flow measure and the deficit or surplus is a stock measure. Both the debt and the deficit or surplus are flow measures. Both the debt and the deficit or surplus are stock measures. The debt is a stock measure and the deficit or surplus is a flow measure. View Feedback Question 11 1 / 1 point If the national debt increases in any given year, it follows that the government: sold bonds in that year to finance a budget surplus. bought bonds in that year to finance a budget surplus. sold bonds in that year to finance a budget deficit. bought bonds in that year to finance a budget deficit. View Feedback Question 12 0 / 1 point If the debt of the federal government decreases by $20 billion in one year the budget: deficit in that year must be $20 billion. surplus in that year must be $20 billion. deficit in that year decreases by $20 billion. surplus in that year increases by $20 billion. View Feedback Question 13 Deficits and debt are often measured relative to GDP because: this method always makes them appear smaller. this method always makes them appear larger. the government's ability to repay the debt depends on GDP. 1 / 1 point

the growth in GDP depends on the debt. View Feedback Question 14 0 / 1 point Which of the following holds the most U.S. government debt? U.S. government agencies. The Federal Reserve. U.S. citizens. Foreigners. View Feedback

Question 15 1 / 1 point Between 1997 and 2008, U.S. external debt rose from 5 percent of GDP to 30 percent. This increase in extern is not a potential problem because repayment does not imply a net reduction in average citizen.

is not a potential problem because government debt differs from the debt of ind

is a potential problem because government debt is no different from the debt o

is a potential problem because repayment implies a net reduction in the income citizen. View Feedback Question 16 1 / 1 point The U.S. debt to GDP ratio in 2008 was approximately: 5 percent. 25 percent. 75 percent. 105 percent. View Feedback Question 17 1 / 1 point When the U.S. debt to GDP ratio has fallen, it has generally been because: the budget deficit fell. the budget deficit rose. income fell. income rose. View Feedback Question 18 1 / 1 point The large budget deficits experienced between 2002 and 2009 caused the U.S. national debt to:

increase in terms of dollars but to decrease as a percentage of GDP. increase both in terms of dollars and as a percentage of GDP. decrease in terms of dollars but to increase as a percentage of GDP. decrease both in terms of dollars and as a percentage of GDP. View Feedback Question 19 As the interest rate rises, debt service: decreases. does not change, but debt increases. increases. does not change and neither does the debt. View Feedback Question 20 Debt service payments by the government: are used to purchase goods and services. are a payment for past expenditures. do not burden the generations that must make them. have fallen continuously since World War II. View Feedback Question 21 1 / 1 point Which of the following factors turned the budget surplus into a deficit in 2002? In 2001, taxes were cut significantly. Economic growth accelerated. The war with Iraq ended sooner than expected. The government reduced expenditures. View Feedback Question 22 Interest rates on government bonds are relatively low because: the debt-to-GDP ratio is almost zero. U.S. government bonds are considered one of the safest assets in the world. many are worried about the U.S. government's defaulting. View Feedback 1 / 1 point 1 / 1 point 1 / 1 point

a majority of the public debt is owed to foreigners and interest rates in foreign

Question 23 0 / 1 point The financial crisis of 2008 led to massive federal spending in an effort to stimulate the combination of the new federal spending and the automatic stabilizers led to the largest budget deficit since World War II. the highest rate of inflation since the Great Depression. a higher government debt-to-GDP ratio than at any time in American history. View Feedback Question 24 1 / 1 point Which of the following would make the impending Social Security problem worse? Raising social security taxes. Raising the age at which one is eligible to receive payments. An increase in the average age at which people die. Taxing social security payments received. View Feedback Question 25 If an economy is operating at potential output: any surplus would be a cyclical surplus. any surplus would be a structural surplus. a budget surplus is impossible. the budget must be in surplus. View Feedback Attempt Score: 22 / 25 (88.00 %) Overall Grade (highest attempt): 22 / 25 (88.00 %) 1 / 1 point

a deficit that is expected to remain permanently at ten percent or more of GDP.

Quiz: Chapter Nineteen

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Written: Dec 6, 2010 9:29 PM - Dec 6, 2010 10:20 PM

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Your quiz has been submitted successfully. Question 1 1 / 1 point As a percentage of total imports, how have U.S. imports from China and India changed in the past 15 years? They have remained roughly the same. They have risen. They have fallen. They rose initially, then dropped back to the original level. View Feedback Question 2 1 / 1 point As a country develops economically, what changes usually take place in the goods it exports? There is little change because comparative advantage does not change. Raw materials and agricultural products decline in importance and are replaced manufactured goods.

Services and manufactured goods decline in importance and are replaced by raw agricultural products.

Exports go from being diversified to being specialized in whatever the country f comparative advantage. View Feedback Question 3 1 / 1 point In the U.S., the outsourcing of service jobs such as those in call centers has become a do economists typically view outsourcing? It helps both countries in the long run.

It hurts both countries because the U.S. loses jobs and the employees of the ca exploited with low wages. It helps the U.S. but hurts the country with the low-cost labor. It helps the country getting the jobs but hurts the U.S. View Feedback Question 4 The U.S. balance of trade has shown a surplus since the 1980s. 0 / 1 point

been in deficit since the 1980s.

gone from a surplus in the 1980s to a deficit in the 1990s back to a surplus sinc View Feedback Question 5 When a country runs a trade surplus, it will: 1 / 1 point

gone from a deficit in the 1980s to a surplus in the 1990s back to a deficit since

borrow from foreign countries or sell assets to them. borrow from foreign countries or buy assets from them. lend to foreign countries or sell assets to them. lend to foreign countries or buy assets from them. View Feedback Question 6 1 / 1 point Countries can expect to gain from international trade as long as they: keep production diversified. specialize according to their comparative advantage.

produce only those goods for which they have a relatively high opportunity cost use trade restrictions to reduce competition for domestic producers. View Feedback Question 7 1 / 1 point Specialization according to comparative advantage means that a country is producing the goods: that it wants to consume. for which it has a relatively high opportunity cost. for which it has a relatively low opportunity cost. that it can produce at zero cost. View Feedback Question 8 1 / 1 point Production Possibility Schedules for Two South Pacific Island Nations

Refer to the table above. In Tuvalu, the opportunity cost of producing one coconut (in terms of mangoes) is: 0. 1/3. 3. 400. View Feedback Question 9 1 / 1 point Production Possibility Schedules for Two South Pacific Island Nations

Refer to the table above. A comparative advantage in the production of coconuts is he Kiribati. Tuvalu. both countries. neither country. View Feedback Question 10 1 / 1 point The country with a comparative advantage in the production of good X is the one that: has the greatest technical efficiency in producing good X. has the greatest supply of the natural resources used in producing good X. can produce good X with the least labor. can produce good X at the lowest opportunity cost. View Feedback

Question 11 1 / 1 point If the U.S. were to stop trading with other nations, economists would predict that in the long run the U.S. wou more jobs. lower prices. a higher standard of living. a lower standard of living.

View Feedback Question 12 The gains from trade: 0 / 1 point

accrue primarily to traders when there are no barriers to entry. tend to go to countries producing goods with diseconomies of scale rather than producing goods with economies of scale. tend to go to small countries rather than large countries. accrue primarily to countries, not traders. View Feedback

Question 13 1 / 1 point Crusoe and Friday are the only two inhabitants of an island and produce and consume only two goods, fish an fish Crusoe catches, he could gather two coconuts. For every fish Friday catches, he could gather one coconu we: cannot determine who has comparative advantage in either good. can determine who has a comparative advantage in fish but not in coconuts. know that Crusoe has the comparative advantage in coconuts. know that Friday has the comparative advantage in coconuts. View Feedback Question 14 1 / 1 point The text mentions ten sources of U.S. comparative advantage. Which of the following A large military Skills of the labor force A stable government An extensive physical and technological infrastructure View Feedback Question 15 1 / 1 point The text calls the type of comparative advantage that is not easily changed, such as climate, stable comparative advantage. inherent comparative advantage. equilibrium comparative advantage. permanent comparative advantage. View Feedback

Question 16 1 / 1 point The WTO authorized several countries to impose about $150 million in trade sanctions against the United Sta U.S. import law that the WTO ruled to be illegal. The WTO that issued this ruling against the United States i

Wage Tariff Objective World Trade Organization Wealth Technology Order Welfare Tax Order View Feedback Question 17 1 / 1 point Analysts have suggested that the cost of bras is related to trade restrictions on textile imports. What does the with tariffs and quotas? Trade restrictions protect consumers by keeping the price of bras low.

Trade restrictions in the form of tariffs keep prices of bras high, but replacing th result in lower prices.

Trade restrictions keep the prices of bras high, and ending them will result in lo

Trade restrictions do not influence the price of bras; the price is determined by technology and the overall inflation rate. View Feedback Question 18 1 / 1 point Duties imposed by the U.S. government on imported Chinese frozen and canned shrim of: tariffs. quotas. voluntary restrictions. regulatory trade restrictions. View Feedback Question 19 An import quota: increases both domestic production and domestic prices. increases domestic production and reduces domestic prices. reduces domestic production and increases domestic prices. reduces both domestic production and domestic prices. View Feedback Question 20 Trade embargoes are generally implemented: to benefit emerging industries. to lower domestic unemployment rates. 1 / 1 point 1 / 1 point

for political reasons. to raise revenue from trade. View Feedback Question 21 Which of the following is not a regulatory trade restriction? Inspections designed to impede trade processes. A limit on the number of imported cars. Leather products banned because of tanning by urine. View Feedback Question 22 0 / 1 point All of the following are arguments in support of protectionist legislation except: supporting infant industries. preserving domestic employment. increasing global trade. promoting national security. View Feedback 0 / 1 point

Vegetables prohibited because of excess pesticide usage.

Question 23 0 / 1 point Trade adjustment assistance is: difficult to implement because the adjustment costs of international trade are g than the gains from trade.

difficult to implement because claims of injury are easy to make and may be po reject.

easy to implement because the adjustment costs of international trade are typic gains from trade.

easy to implement because it is easy to identify the few industries genuinely inj international trade. View Feedback Question 24 0 / 1 point Infant industry protection can be justified in theory by:

both the "learning by doing" argument and the existence of economies of scale.

the "learning by doing" argument but not by the existence of economies of scal

the existence of economies of scale but not by the "learning by doing" argumen View Feedback

neither the "learning by doing" argument nor the existence of economies of sca

Question 25 Economists generally agree that:

1 / 1 point

trade restrictions will increase the welfare of a large country, even if other coun trade between two nations generally benefits one at the expense of the other.

infant industry protection, although justified in theory, often becomes permanen industries fail to grow up. View Feedback Attempt Score: 19 / 25 (76.00 %) Overall Grade (highest attempt): 19 / 25 (76.00 %)

trade embargoes are not an effective way of achieving international political obj