ANSWERS - Test 1 1 Primary reason why nations trade with one another-resources are scarce and not equally distributed among all nations 2 Specialization

ANSWERS - Test 1 1 Primary reason why nations trade with...

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Test 1 3.Multilateral trade negotiations have led to- all of the above 4.If a nation has an open economy, it means the country- 5.International trade forces domestic firms to become more competitive in terms of-1) 6.Movement to free int’l trade is most likely to generate short-term unemployment in which domestic industries? 7. The single most important phenomenon in int’l trade in the past 25 years is- increase in Chinese exports 8. Arguments for free trade are disregarded by politicians b/c- maximizing consumer welfare is not a chief priority 9. Physical output of a worker depends on- 1) motivation and skill 2) technology, plant & equipment 3) easy product to manufacture 4) skill level 5) all of the above 10. The largest amount of trade with the U.S. is with what country?- Canada 11. Increased foreign competition through trade tends to- decrease wages of domestic workers 12. Competitiveness is the ability of industry, under free/fair market conditions, to design, produce, and market goods and services that are better and/or cheaper than those of other firms/industries 13. A firm’s productivity relative to that of other firms is generally regarded as the most important determinant of competition 14. Increased globalization is fostered by- reduced transportation costs 15. A reduce share of the world export market for the U.S. would be attributed to- decreased productivity in U.S. manufacturing relative to others 16. Which was a possible cause of global economic crisis? surge in mortgage loan defaults in U.S. 17. As a possible cause of globalization, empirical research indicates which of the following as a major reason?- productivity performance gains 18. Since 1986, foreign exchange market for US has- increase almost tenfold 19. Openness of an economy is measured by -% that imports and exports are of total GDP 20. Openness of an economy tends to be- larger for small countries 21. Which of the following would least likely apply to product life cycle theory?- coal and crude oil 22. Heckscher-Ohlin factor endowment theory explains comparative advantage is a result of- relative abundance of various resources 23. Leontief paradox attempted to provide- evidence against the Heckscher-Ohlin model 24. Leontief paradox- suggested US exported labor-intensive goods and imported capital intensive goods

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