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80. What is dollarization? What risk does a country eliminate when it dollarizes?

81. When a country is open to free trade, there will be gains to:

A.

producers in the country that is importing the good.

B.

producers in the country that is exporting the good.

C.

all producers of the good in both the importing and the exporting country.

D.

None of the producers will gain.

82. When the European Central Bank made loans to member countries, it sometimes attached conditions to the loans. What were the MOST common requirements for getting these loans?

83. When the United States has a current account deficit, it must:

A.

sell more exports to balance the account.

B.

reduce its net transfers to balance the account.

C.

be balanced with capital inflows from foreign countries.

D.

buy bonds from foreign countries to balance the account.

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31 Jul 2019

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Related questions

Which of the following is TRUE regarding international trade?

Select one:

a. Typically, it is belived that when countries trade with one another, ther eare gains in production efficiency.

b. All of these are correct

c. Freedom to trade internationally adds to the consumers' choices available for purhcase

d. Countries often hope that international trade will help raise the standard of living for their citizens

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Which of the following is TRUE regarding why countries trade with one another?

Select one:

a. Countries trade so that they can get products and services that they are not as efficient in making as other countries.

b. Countries often hope that international trade will help their economy grow

c. All of these are correct

d. Countries trade because not all nations have the same resources.

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Revenue tariffs are levied to

Select one:

a. lower exports.

b. protect domestic producers.

c. increase imports.

d. raise money.

Question 4

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Tariffs and quotas can have all of the following effects EXCEPT

Select one:

a. protecting domestic industry.

b. reducing trade deficits.

c. increasing prices consumers pay for goods.

d. promoting third-world development.

Question 5

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The United States trade deficit causes

Select one:

a. the value of the dollar to fall in foreign exchange markets.

b. immediate worldwide recessions.

c. increased employment opportunities for all Americans.

d. the value of the dollar to strengthen in foreign exchange markets.

Question 6

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Which of the following is true regarding the relationship of international trade and competition?

Select one:

a. International competition, like competition in general, can have effects on the price levels of goods.

b. When countries trade with one another, there is often increased competition among firms offering the same good or service.

c. All of these are correct.

d. When tariffs increase, domestic producers usually have fewer international competitors.

5-

In the short run, a tighter monetary policy by the U.S. Federal Reserve leads to:

Select one:

a. an increase in the supply of dollars and a dollar depreciation.

b. a decrease in the supply of dollars and a dollar appreciation.

c. an increase in the demand for dollars and a dollar depreciation.

d. a decrease in the demand for dollars and a dollar appreciation.

6-

Which theorem states that exchange rates will adjust until the prices of goods in different countries approximate one another?

Select one:

a. purchasing power parity

b. the law of multiple prices

c. the principle of comparative advantage

d. dollarization

7-

A country's balance of trade is the difference between its:

Select one:

a. nominal and real exchange rates.

b. monetary and fiscal policy.

c. exports and imports.

d. capital inflow and capital outflow.

8-

When a foreign business buys stock in a U.S. company, the U.S. capital account will:

Select one:

a. move in a positive direction.

b. move in a negative direction.

c. remain unchanged.

d. become more volatile.

9-

Saying that the United States is running a large current account deficit is equivalent to saying that:

Select one:

a. exports exceed imports in the United States.

b. the United States is running a large capital account surplus.

c. the balance of payments is negative.

d. the value of the current capital stock in the United States exceeds the value of future capital flows.

10-

An increase in the demand for a country's exports will have what effect on its currency?

Select one:

a. Its value will not change.

b. Its value will increase.

c. Its value will decrease.

d. Its value will depreciate.

11-

When the United States has a current account deficit, the U.S. capital account:

Select one:

a. will have a deficit also.

b. will be balanced.

c. will have a surplus.

d. must be falling.

12-

Which of the following is NOT a way that a country can finance a trade deficit?

Select one:

a. increased borrowing

b. sale of assets

c. decreased exports

d. reduction in cash reserves

13-

A trade deficit occurs when the value of a country's:

Select one:

a. imports exceeds the value of its exports.

b. exports exceeds the value of its imports.

c. inflow of foreign capital exceeds the outflow of domestic capital.

d. outflow of domestic capital exceeds its inflow of foreign capital.

14-

Which of the following is a U.S. current account transaction?

Select one:

a. Selling a computer chip to a resident in Europe.

b. Buying stock shares of a Canadian company.

c. Selling U.S. dollars in exchange for euros.

d. A foreign investor's purchase of a manufacturing plant in the United States.

15-

An exchange rate is:

Select one:

a. a yearly summary of all the economic transactions between residents of one country and residents of the rest of the world.

b. the sum of the balance of trade, net income on capital held abroad, and net transfer payments.

c. the price of one currency in terms of another currency.

d. a currency whose value is not pegged but governments will intervene extensively in the market to keep the value within a certain range.

We hear so much about the depletion of the ozone, the destruction of the rain forest, the pollution of the oceans and rivers, and the depletion of wildlife because

a. private individuals and businesses lack the time to take full account of these issues.

b. private individuals and businesses don�t care about our environment.

c. scientists are looking to make names for themselves and thereby gain a lot of publicity.

d. the media focuses on negative stories.

e. private individuals and businesses lack incentives to take full account of the consequences of their actions.

4. An externality exists when

a. some of the costs of producing a product affect people unable, within a market system, to influence how much of a product should be produced.

b. only the buyers and sellers are affected by the production of a product or service.

c. every person in a market system has a chance to influence how much of a product should be produced.

d. the benefits from consuming the service affect only the purchasers of that service.

e. the costs of producing a service affect only the sellers of that service.

Why are chickens and cows not listed on the endangered species list?

a. People want to eat chickens and cows.

b. People cannot own a chicken or a cow.

c. Chickens and cows reproduce regularly.

d. Private property rights exist for chicken and cows.

e. People will pay to have chicken or beef.

10. Public radio raises its funding by staging telethons where no programs are aired for a period of time as the station solicits contributions. The stations have trouble raising money because

a. the government assigns private property rights to goods.

b. the consumption of a good cannot be limited to the person who purchased it.

c. the broadcasts are private.

d. people do not act in their own self-interest.

e. a monopoly produces a good.

The United States is a major trading partner for many nations because of the

a. size of the U.S. economy and its relatively high level of income.

b. free market benefits of capitalism.

c. commitment of the United States to help immigrants by both importing from and exporting to their countries of origin.

d. active participation of the United States in both the International Monetary Fund and the World Bank.

e. protection to shipping offered by the U.S. strategic presence in vital commercial areas, such as the Middle East.

18. Which of the following statements about international trade restrictions is true?

a. They typically benefit foreign producers at the expense of domestic consumers.

b. They ensure that countries will specialize in those products which they can produce most efficiently.

c. In the majority of cases they harm consumers.

d. They ensure that only efficient producers survive.

e. They ensure that higher-quality goods are provided at lower prices.

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