Exam 1
Topics: International trade, Investment, Economics, World Trade Organization / Pages: 5 (968 words) / Published: Apr 28th, 2014

E470 International Economics
Study Questions
Chapter 1
Part 1: Multiple Choice. Select the best answer of those given.
1). Approximately what percentage of what the United States consumes is produced inside its borders?
a. 2%
b. 15%
c. 50%
d. 82%
e. 98%
Ans: d (82.3%, according to Gerber.)

2) The index of openness for a nation that had $300 million in exports, $200 million in imports, and GDP of $1,000 million would be
A) 0.1.
B) 0.2.
C) 0.5.
D) -0.1.
Answer: C

3) Countries such as the United States that have large populations tend to have
A) higher openness indicators.
B) lower openness indicators.
C) relatively greater capital outflows.
D) relatively smaller capital outflows.
E) None of the above.
Answer: B

4) An important factor that increased international capital flows in the second half of the nineteenth century was
A) the creation of the International Monetary Fund.
B) the creation of numerous regional trade agreements.
C) the rapid rate of East Asian economic growth.
D) technological innovations.
E) the creation of the World Bank.
Answer: D

5) Labor mobility was
A) less in 1900 than in 1999.
B) unimportant to global integration until the 1960s.
C) greater in 1900 than in 1999.
D) never controversial.
E) a brand new feature of the global economy in the twenty-first century.
Answer: C

6) A major impact of the transatlantic telegraph was
A) a reduction in time required to obtain market information and conclude a transaction between New York and London
B) an increase in labor flows across the Atlantic.
C) a decrease in trade barriers between the United States and Europe.
D) an increase in trade conflicts between the United States and Europe.
E) None of the above.
Answer: A

7) Transaction costs include the costs of
A) wages paid to labor.
B) buying materials to be used as inputs.
C) electricity and other utilities used in production.
D) hiring a lawyer to go over all the contracts.
E) All of the

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