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1 | |
As a percentage of GDP, Canada exports are approximately: |
| | A) | 40%-45%. |
| | B) | 35%-40%. |
| | C) | 30%-35%. |
| | D) | 25%-30%. |
| | E) | 20%-25%. |
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2 | |
The percentage of Canada's merchandise exports destined for the US is about: |
| | A) | 55%. |
| | B) | 65%. |
| | C) | 75%. |
| | D) | 85%. |
| | E) | 95%. |
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3 | |
About what proportion of Canada's merchandise trade is resource-based? |
| | A) | one quarter |
| | B) | one third |
| | C) | half |
| | D) | three fifths |
| | E) | two thirds |
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4 | |
Trade is based on absolute advantage when: |
| | A) | each trading partner makes a product using more resources than other trading partners would. |
| | B) | each trading partner makes a product at a lower opportunity cost than other trading partners would. |
| | C) | each trading partner makes a product using fewer resources than other trading partners would. |
| | D) | each trading partner makes a product at a higher opportunity cost than other trading partners would. |
| | E) | each trading partner makes products which have exactly the same opportunity cost in each country. |
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5 | |
Trade is based on comparative advantage when: |
| | A) | each trading partner makes a product using more resources than other trading partners would. |
| | B) | each trading partner makes a product at a lower opportunity cost than other trading partners would. |
| | C) | each trading partner makes a product using fewer resources than other trading partners would. |
| | D) | each trading partner makes a product at a higher opportunity cost than other trading partners would. |
| | E) | each trading partner makes products which have exactly the same opportunity cost in each country. |
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6 | |
The limits of the terms of trade for two products are based on: |
| | A) | the global demand for the two items. |
| | B) | the relative political power of the trading partners. |
| | C) | the size of the markets in each of the trading countries. |
| | D) | the opportunity costs of the items in each country |
| | E) | how distant the two trading countries are from one another. |
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7 | |
If a tariff is imposed on imports of an item sold in a perfectly competitive market: |
| | A) | consumers and foreign producers lose, while domestic producers and the government gain. |
| | B) | consumers and the government lose, while domestic and foreign producers gain. |
| | C) | consumers and domestic producers are unaffected, while foreign producers lose and the government gains. |
| | D) | the government is unaffected, consumers lose, while domestic and foreign producers gain. |
| | E) | consumers and foreign producers are unaffected, while domestic producers and the government gain. |
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8 | |
Foreign producers generally prefer import quotas to tariffs because: |
| | A) | they always have a say in how import quotas are applied. |
| | B) | it is easier to retaliate against import quotas than it is against tariffs. |
| | C) | they receive a higher price for the units they sell in the affected market. |
| | D) | they sell more units of output than they otherwise would. |
| | E) | import quotas do not affect them. |
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9 | |
Which of the following is not a possible argument in favour of trade protection? |
| | A) | to help an economy satisfy the principle of comparative advantage |
| | B) | the need to keep out products made by cheap foreign labour |
| | C) | an improvement in a country's terms of trade |
| | D) | cultural sovereignty |
| | E) | protection of infant industries |
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10 | |
Sir John A. Macdonald's National Policy: |
| | A) | established high tariffs on resource imports. |
| | B) | was meant to stimulate the development of a domestic manufacturing sector. |
| | C) | used export subsidies on Candian manufactured goods as its primary tool. |
| | D) | had as its aim the creation of a free trade area with the US. |
| | E) | established high tariffs on resource exports. |
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11 | |
The World Trade Organization: |
| | A) | is an example of a bilateral free trade agreement. |
| | B) | has no mechanism for resolving international trade disputes. |
| | C) | has been replaced by the General Agreement on Tariffs and Trade. |
| | D) | is a multilateral trade organization with over 120 member countries. |
| | E) | is an example of a customs union. |
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12 | |
The European Union is an example of a: |
| | A) | common market |
| | B) | customs union |
| | C) | free trade area |
| | D) | informal international alliance |
| | E) | new unitary state |
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13 | |
The Free Trade Agreement between Canada and the US: |
| | A) | incorporates trade in services as well as in goods. |
| | B) | has led to the elimination of all tariffs on trade between the two countries. |
| | C) | largely exempts Canadian cultural policies. |
| | D) | includes a dispute settlement procedure to deal with trade disagreements. |
| | E) | all of the above |
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14 | |
The North American Free Trade Agreement: |
| | A) | is a common market between Canada, the US, Mexico, and Chile. |
| | B) | is a common market including Canada, the US, and Mexico. |
| | C) | is a free trade agreement among Canada, the US, and Mexico. |
| | D) | is a customs union including Canada, the US, and Mexico. |
| | E) | represents the formation of a new sovereign country combining Canada, the US and Chile. |
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15 | |
According to John Helliwell: |
| | A) | globalization has resulted in a significant loss of policy-making power for Canadian governments. |
| | B) | trade flows between Canada and the US are not affected by the presence of national borders. |
| | C) | Canadian migration to the US is higher now as a proportion of Canada's population than ever before. |
| | D) | Canada's spending on education as a fraction of GDP is much lower than for most other OECD countries. |
| | E) | small economies can still perform well in today's global economy. |
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2002 McGraw-Hill Higher Education