chapter 31 eco121

One year a country has negative net exports. The next year it still has negative net exports and imports have risen more than exports.

• its trade surplus fell
  

• its trade surplus rose
  

• its trade deficit fell
  

• its trade deficit rose

Suppose that a country imports $100 million of goods and services and exports $75 million of goods and services, what is the value of net exports?

• $175 million
  

• $75 million
  

• $25 million
  

• -$25 million

A firm in China sells jackets to a U.S. department store chain. Other things the same, these sales

• increases U.S. and Chinese net exports

• decreases U.S. and Chinese net exports

• increases U.S. net exports and increases Chinese net exports

• decreases U.S. net exports and increase Chinese net exports.

Which of the following is correct?

• NCO + C = NX

• NCO = NX

• NX - NCO = C

• NX + NCO = C

If there is a trade deficit, then

• saving is greater than domestic investment and Y > C + I + G.

• saving is greater than domestic investment and Y < C + I + G.

• saving is less than domestic investment and Y > C + I + G.

• saving is less than domestic investment and Y < C + I + G.

If you were told that the exchange rate was 1.2 Canadian dollars per U.S. dollar, a watch that costs $12 US dollars would cost

• $8.5 Canadian dollars

• $10 Canadian dollars

• $12.20 Canadian dollars

• $14.40 Canadian dollars

In the United States, a three-pound can of coffee costs about $5. Suppose the exchange rate is about 0.8 euros per dollar and that a three-pound can of coffee in Belgium costs about 3 euros. What is the real exchange rate?

• 5/3 cans of Belgian coffee per can of U.S. coffee

• 4/3 cans of Belgian coffee per can of U.S. coffee

• 3/4 cans of Belgian coffee per can of U.S. coffee
  

• 3/5 cans of Belgian coffee per can of U.S. coffee