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1 | |
Which of the following represents an example of Canadian imports of goods/services? |
| | A) | Canada purchases cars from Germany |
| | B) | Canada sells technology equipment to the U. S. |
| | C) | Japan purchases wheat from Canada |
| | D) | Russia purchases fruits and vegetables from Canada |
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2 | |
Canada's exports represent approximately what percentage of Canada's GDP (the market value of all goods and services produced in Canada in a given year). |
| | A) | 10% |
| | B) | 20% |
| | C) | 30% |
| | D) | 40% |
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3 | |
What is Canada' largest trading partner? |
| | A) | Japan |
| | B) | The U.S. |
| | C) | European Union |
| | D) | None of the other choices |
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4 | |
If Canada had a trade deficit in goods and services, then... |
| | A) | Its exports of goods and services exceed its imports of goods and services |
| | B) | Its imports of goods and services exceeds its exports of goods and services |
| | C) | Its imports of goods and services just equal its exports of goods and services |
| | D) | None of the other choices |
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5 | |
The expanded circular flow model demonstrates that... |
| | A) | In a global economy, Canada may be negatively affected by economic slowdowns experienced by its trading partners |
| | B) | Canada's purchase of imports provides foreign households with the means to purchase Canadian exports. |
| | C) | Canadian resources will be shifted away from those industries that Canada imports, toward those industries that Canada exports. |
| | D) | All of the other choices |
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6 | |
Which of the following statements is untrue? |
| | A) | If country A has a comparative advantage in the production of apples over oranges, then it should produce apples |
| | B) | If country B has an absolute advantage in the production of apples and oranges, it cannot gain from trading with country A. |
| | C) | If country B can product more of both apples and oranges, than country A in a given year, then country B has an absolute advantage in the production of both apples and oranges. |
| | D) | All of the other choices are true. |
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7 | |
Country A and country B produce two goods – coffee and bananas. If country A specializes in bananas, it can produce 100Kg per day. If it specializes in coffee, it can produce 50 Kg per day. If country B specializes in bananas, it can produce 120 Kg per day, but if it specializes in coffee, it can produce 80 Kg per day. If constant opportunity costs exists for both countries A and B... |
| | A) | Country A has a corporative advantage in the production of coffee. |
| | B) | Country A has an absolute advantage in the production of both goods |
| | C) | Country B has a corporative advantage in the production of bananas |
| | D) | Country B has a absolute advantage in the production of both goods |
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8 | |
The opportunity cost of producing 1Kg of banana in country A is: |
| | A) | 0.5 Kg of coffee |
| | B) | 2 Kg of coffee |
| | C) | 1.5Kg of coffee |
| | D) | 0.67 of coffee |
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9 | |
Based on the data provided above, which of the following statements is true? |
| | A) | Country A has a comparative advantage in the production of bananas |
| | B) | Country B has a comparative advantage in the production of coffee. |
| | C) | Both A and B can gain from trading coffee and bananas |
| | D) | All of the other choices |
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10 | |
Which of the following will be an acceptable terms of trade for both countries A and B, using the example above? |
| | A) | 1 Kg of bananas for 1Kg of coffee |
| | B) | 0.5 Kg of coffee for 1 Kg of bananas |
| | C) | 1Kg of coffee for 2 Kg of bananas |
| | D) | 1 Kg of bananas for 0.6 Kg of coffee |
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11 | |
Specialization and trade allows... |
| | A) | Both countries to produce on their individual PPFS. |
| | B) | One country to product its PPF and the other beyond its PPF |
| | C) | Both countries to produce beyond their PPFS. |
| | D) | None of the other choices |
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12 | |
Karen recently went to the United States and spent C$693.09 to buy US$453.00 worth of goods – the Canadian exchange in U.S. is... |
| | A) | $0.65 U.S. |
| | B) | $1.50 U.S. |
| | C) | $0.75 U.S. |
| | D) | $2.00 U.S. |
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13 | |
The currency of Germany is "marks". If Germany increases its exports of luxury cars to Canada, then... |
| | A) | Germany will demand payment in dollars and Canada will exchange marks for dollars in the foreign exchange market |
| | B) | Germany will demand marks in payment and Canada will supply dollars in exchange for marks in the foreign exchange market. |
| | C) | Canada will demand dollars in payment and Germany will supply marks in exchange for dollars in the foreign exchange market. |
| | D) | None of the choices is true |
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14 | |
Consider the previous question. How would this transaction affect the dollar price of marks? |
| | A) | Since the demand for marks has increased, the dollar price of marks has increased. |
| | B) | Since supply of marks has increased, the dollar price of marks has decreased |
| | C) | Since demand for marks has decreased, the dollar price of marks has decreased |
| | D) | None of the other choices |
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15 | |
If Germany demands more wheat from Canada, then... |
| | A) | The Canadian dollar would depreciate |
| | B) | The Canadian dollar would appreciate |
| | C) | The mark would appreciate |
| | D) | None of the other choices |
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16 | |
In the newspaper on a given day, the U.S. dollar price of one Canadian dollar is US$0.67. Two days later, C$1 exchanges for US$0.66. We can conclude that... |
| | A) | The Canadian dollar has appreciated |
| | B) | The U.S. dollar has depreciated |
| | C) | The Canadian dollar has depreciated |
| | D) | None of the other choices |
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17 | |
Which of the following would not cause the dollar price of the British pound to rise? |
| | A) | An increase in Canadian income, which results in Canadians buying more British-made sports cars. |
| | B) | An increase in Canadian tasks and preferences for British-made beer. |
| | C) | An increase in British income, which results in Canadian exporting more wheat to Britain (England). |
| | D) | None of the other choices |
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18 | |
Which of the following would likely result in an increase in Canadian imports of French wine |
| | A) | Depreciation of the Canadian dollar |
| | B) | Appreciation of the Canadian dollar |
| | C) | Appreciation of the French Franc |
| | D) | None of the other choices |
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19 | |
A tax placed on imports "to help shield domestic producers from foreign competition" is called... |
| | A) | An import quota |
| | B) | An export subsidy |
| | C) | A protective tariff |
| | D) | A license requirement used as a barrier against trade |
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20 | |
Which of the following is not a reason for government trade interventions? |
| | A) | The belief that exports are "good", whereas imports are "bad" |
| | B) | Political pressure from a few producers backing protective tariffs |
| | C) | Protective tariffs increase the price of imported goods, reducing the demand for these goods, and protecting employment in Canadian industries |
| | D) | Protective tariffs will benefit both consumers and producers |
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21 | |
Canadian tariff rates have generally ____ over time since the mid 1930's |
| | A) | Increased |
| | B) | Decreased |
| | C) | Stayed the same |
| | D) | None of the other choices |
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22 | |
The World Trade Organization is controversial because... |
| | A) | It has so many nations that belong to it |
| | B) | It favours decreasing tariff rates |
| | C) | Critics fear that its policies may interfere with national laws that currently protect workers and the environment |
| | D) | It helps to settle trade disputes |
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23 | |
The Euro... |
| | A) | Will be used along with existing European currencies in January 2002 |
| | B) | Will "end the inconvenience and expense of exchanging currencies" |
| | C) | Is expected to have a positive impact on Europe by helping goods, services and resources to flow more freely. |
| | D) | All of the other choices |
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24 | |
According to authors, which of the following is true of increased global competition? |
| | A) | "Foreign competition benefits consumers and society in general" |
| | B) | Most Canadian firms are unsuccessful in competing globally |
| | C) | Firms that cannot compete globally should receive subsidies from the federal government |
| | D) | None of the other choices |
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25 | |
Which of the following is true? |
| | A) | Each nation's imports creates a demand for its own currency and a supply of foreign currencies |
| | B) | Each nation's exports create a demand for its own currency and a supply of foreign currency |
| | C) | Depreciation of a nation's currency will decrease its exports |
| | D) | Appreciation of a nation's currency will decrease its imports |
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2002 McGraw-Hill Higher Education