The U.S. and the Global Economy

What is a big reason why international trade has increased so much in the past 50 years? 

• improvements in transporation
• larger, cheaper goods being traded
• tighter airport security
• crackdown on piracy in international waters. 

Which service would be considered a U.S. export? 

• a U.S. business traveler stays in a hotel in Australia
• a French movie attracts large crowds at U.S. theaters. 
• a Dutch family hosts a high school student from the U.S. 
• A German student pays tuition to attend college in the U.S. 

Most economists...

• support free trade
• support import quotas
• support trade embargoes
• support all trade restrictions

Which of the following represents a trade deficit? 

• exports equal imports
• exports are greater than imports
• imports are greater than exports

Which concept explains why a country would both import and export a particular type of good? 

• comparative advantage
• import quota
• product differentiation
• voluntary restraints

How do economists generally feel about the global economy? 

• They dislike it because it causes unemployment
• They support it because they feel the benefits outweigh the costs
• They are indifferent to it because its effects are inconsistent.
• They believe it benefits smaller countries more than larger one. 

Which has NOT contributed to the rapid increase in global trade?

• the decrease in the demand for agricultural goods
• the development of more advanced jet planes
• the use of satellite systems to communicate with internet and cell phones
• the shift of trade to lighter manufactured goods

What does it mean if a country has a trade surplus?

• it has a high exchange rate
• it has a low exchange rate
• its exports are greater than its imports
• its imports are greater than it exports

When a country can produce a good or service at a lower opportunity cost than its competitors can

• an absolute advantage
• a global advantage
• an international advantage
• a comparative advantage

If you like to buy American made cheese and cheese made in France, we know cheese is 

• an international product
• an inelastic product
• a comparative product
• a differentiated product