Macroeconomics Answers

QUESTION 19

Protectionism:

1. Is always the best solution.
2. Costs jobs in the protected industry.
3. Creates jobs in other unprotected industries.
4. Costs jobs in other unprotected industries.
5. None of the above.

QUESTION 20

One concern is that globalization may:

1. Impose costs on low-skilled workers.
2. Benefit low-skilled workers.
3. Benefit low-wage workers.
4. Impose costs on high-skilled workers.
5. Impose costs on high-wage workers.

QUESTION 21

Trade will cause the average level of wages in an economy:

1. To increase.
2. To remain unchanged.
3. To decrease.
4. To stagnate.
5. To do loops.

QUESTION 22

The real problem in low-income countries is that:

1. They are all run by brutal dictators.
2. They have too many high-skilled workers.
3. They have so many good life alternatives.
4. They have so few good life alternatives.
5. All of the above.

QUESTION 15

In the U.S., the impact of trade:

1. On high-income workers is small.
2. On low-income workers is small.
3. On low-income workers is large.
4. On large-income workers is small.
5. Is negligible.

QUESTION 16

Eliminating trade barriers in one sector of the economy will likely result in:

1. No change in the number of jobs.
2. An increase in the number of jobs in other sectors.
3. A decrease in the number of jobs in that sector.
4. All of the above.
5. Answers B and C only.

QUESTION 17

When a country enacts protectionism:

1. It gains net economic benefits.
2. It has no impact on economic benefits.
3. It loses net economic benefits.
4. It favors trade with other countries.
5. All of the above.

QUESTION 18

These often have a better record of compliance with environmental laws.

1. Foreign-owned plants in the U.S.
2. Foreign-owned plants in high-income countries.
3. Foreign-owned plants in low-income countries.
4. U.S.-owned plants in all other countries.
5. All of the above.

QUESTION 11

How much do United States consumers pay for food because of elevated sugar costs?

1. $1 million.
2. $10 million.
3. $100 million.
4. $1 billion.
5. $10 billion.

QUESTION 12

Protectionism for infant industries always imposes costs on:

1. The government alone.
2. Domestic users of the product.
3. Foreign users of the product.
4. Domestic producers of the product.
5. All of the above.

QUESTION 13

Consumers end up paying billions of dollars more for clothing each year:

1. In lesser developed countries.
2. In unregulated countries.
3. Because textile and apparel protectionism adds to the costs of imports.
4. Because textile and apparel protectionism is impossible.
5. Because textile and apparel protectionism decreases the costs of imports.

QUESTION 14

An argument for shutting out certain imported products is that:

1. They are perfectly safe for all users.
2. They are perfectly safe for some users.
3. They are unsafe for consumers.
4. They are unsafe for producers.
5. They are perfectly safe for producers.

QUESTION 8

This argument for protectionism is to block imports for only a limited time.

1. The jobs argument.
2. The national defense argument.
3. The infant industry argument.
4. The inflated industry argument.
5. All of the above.

QUESTION 9

Trade policy is an example where regulations can redirect economic forces:

1. And prevent them from manifesting themselves elsewhere.
2. But it cannot prevent them from manifesting themselves elsewhere.
3. Always causing significant harm to society.
4. Always creating significant benefit for society.
5. All of the above.

QUESTION 10

These laws block imports that are sold below the cost of production.

1. Antitrust laws.
2. Unfair competition laws.
3. Anti-dumping laws.
4. Anti-selling laws.
5. Anteater laws.

QUESTION 5

Americans had the least favorable attitude toward increasing globalization with:

1. 38% surveyed saying very good.
2. 53 percent surveyed saying somewhat good.
3. 59 percent total in favor.
4. 59% total against globalization.
5. All of the above.

QUESTION 6

The support of farmers in high-income countries:

1. Harms farmers in those high-income countries.
2. Has no impact on farmers in those high-income countries.
3. Also benefits farmers in low-income countries.
4. Has no impact on farmers in low-income countries.
5. Is devastating to the livelihoods of farmers in low-income countries.

QUESTION 7

A rule requiring certain safety standards can:

1. Limit imports as effectively as high tariffs.
2. Limit imports as effectively as low import quotas.
3. Limit imports only less effectively than high tariffs.
4. Limit imports only less effectively than low import quotas.
5. Both answers A and B above.

QUESTION 1

What is the annual cost per job saved through protectionism in the ball bearing industry?

1. $200,000.
2. $400,000.
3. $600,000.
4. $800,000.
5. $1 million.

QUESTION 2

The U.S.:

1. Is the only country that trades.
2. Is less internationally connected than most countries.
3. Is more internationally connected that most countries.
4. All of the above.
5. None of the above.

QUESTION 3

Protectionism is simply a method of:

1. Requiring consumers to subsidize producers.
2. Requiring producers to subsidize consumers.
3. Requiring consumers to subsidize themselves.
4. Requiring producers to subsidize themselves.
5. All of the above.

QUESTION 4

It is difficult to find evidence of:

1. Predatory pricing by foreign firms exporting to the U.S.
2. Infant industries.
3. Protectionism.
4. All of the above.
5. None of the above.

QUESTION 15

When one country has an absolute advantage in all goods:

1. Then trade cannot occur.
2. Then trade is not advantageous.
3. Then only one country can benefit from trade.
4. Then both countries can still benefit from trade.
5. Then both countries would be harmed by trade.

QUESTION 16

The theory of comparative advantage suggests that:

1. Trade is a zero-sum situation.
2. One country can only benefit at the expense of another.
3. Everyone will benefit if they figure out their areas of comparative advantage.
4. Everyone will benefit if they focus on their areas of absolute advantage.
5. All of the above.

QUESTION 17

Trade has accompanied economic growth:

1. In the U.S., but not in the rest of the world.
2. In the U.S., and the rest of the world.
3. In the rest of the world, but not in the U.S.
4. Neither in the U.S. nor in the rest of the world.
5. All of the above.

QUESTION 18

Samsung is Apple Computer’s:

1. Largest supplier.
2. Greatest competitor.
3. Largest customer.
4. All of the above.
5. Answers A and B only.

QUESTION 12

The volume of international trade:

1. Has increased dramatically in the last few decades.
2. Has increased slightly in the last few decades.
3. Has decreased slightly in the last few decades
4. Has decreased dramatically in the last few decades.
5. All of the above.

QUESTION 13

It is difficult to measure the potential advantages to consumers of:

1. Having a variety of products available.
2. Having a greater degree of competition among producers.
3. Producing more efficiently.
4. All of the above.
5. Answers A and B only.

QUESTION 14

We all benefit from living in economies where:

1. Fundamental beliefs are strictly enforced.
2. People and firms can specialize and trade with each other.
3. People and firms are prevented from specializing.
4. People and firms are prevented from trading.
5. All of the above.  

QUESTION 8

Gains from trade come from:

1. Excessive negotiations.
2. Specializing in one’s comparative advantage.
3. Individuals becoming generalists.
4. Above.
5. All of the above.

QUESTION 9

Even without 100% specialization, if the trading price is greater than the country’s opportunity cost:

1. There are benefits to trading.
2. Is constant.
3. Is fixed.
4. No trades will take place.
5. All of the above.  

QUESTION 10

Why do countries trade?

1. International law requires them to.
2. They have similar comparative advantages.
3. They have identical comparative advantages.
4. They have different comparative advantages.
5. They have identical absolute advantages.

QUESTION 11

Absolute advantage simply compares the productivity of a worker:

1. In leaner years.
2. To the productivity of capital.
3. In one year to that same worker in a different year.
4. Between countries.
5. All of the above.

QUESTION 4

Traditionally, tariffs were used simply as a political tool to protect:

1. Certain social interests.
2. Certain cultural interests.
3. Certain vested economic interests.
4. All of the above.
5. None of the above.

QUESTION 5

The linear production possibilities frontier:

1. Is a less realistic model.
2. Is a more realistic model.
3. Illustrates increasing opportunity costs.
4. Illustrates decreasing opportunity costs.
5. All of the above.

QUESTION 6

The underlying reason why trade benefits both sides is:

1. The government forces it to.
2. Based on absolute advantage.
3. Rooted in the concept of opportunity cost.
4. Tooted from the hills.
5. Muted on the television.

QUESTION 7

Trade really occurs:

1. To keep poor folks down.
2. To get even with the rich.
3. Because of absolute advantage.
4. Because of comparative advantage.
5. All of the above.