Topic8 - TOPIC8_2011 CHAP:OPEN MACROECONOMICSBASIC CONCEPTS

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TOPIC 8_ 2011 CHAP: OPEN-  MACROECONOMICS BASIC  CONCEPTS PART 1: MULTPLE CHOICES: 1. One year a country has negative net exports. The next year it still has negative  net exports and imports have risen more than exports. a. its trade surplus fell. b. its trade surplus rose. c. its trade deficit fell. d. its trade deficit rose 2. International trade a. raises the standard of living in all trading countries. b. lowers the standard of living in all trading countries. c. leaves the standard of living unchanged. d. raises the standard of living for importing countries and lowers it for  exporting countries. 3.  Sonya, a citizen of Denmark, produces boots and shoes that she sells to  department stores in the United States. Other things the same, these sales a. increase U.S. net exports and have no effect on Danish net exports. b. decrease U.S. net exports and have no effect on Danish net exports. c. increase U.S. net exports and decrease Danish net exports. d. decrease U.S. net exports and increase Danish net exports. 4. A country sells more to foreign countries than it buys from them. It has a. a trade surplus and positive net exports.
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c. a trade deficit and positive net exports. d. a trade deficit and negative net exports. 5. A country's trade balance a. must be zero. b. must be greater than zero. c. is greater than zero only if exports are greater than imports. d. is greater than zero only if imports are greater than exports. 6. The increase in international trade in the United States is partly due to a. improvements in transportation. b. advances in telecommunications. c. increased trade of goods with a high value per pound. d. All of the above are correct. 7. Net capital outflow measures a. foreign assets held by domestic residents minus domestic assets held by  foreign residents. b. the imbalance between the amount of foreign assets bought by domestic  residents and the amount of domestic assets bought by foreigners. c. the imbalance between the amount of foreign assets bought by domestic  residents   and   the   amount   of   domestic   goods   and   services   sold   to  foreigners. d. None of the above is correct. 8. If a country changes its corporate tax laws so that domestic firms build and  manage more firms overseas, then this country will a. increase foreign direct investment which increases net capital outflow. b. increase foreign direct investment which decreases net capital outflow.
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This note was uploaded on 07/15/2011 for the course ECON 101 taught by Professor Abcd during the Spring '11 term at RMIT Vietnam.

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Topic8 - TOPIC8_2011 CHAP:OPEN MACROECONOMICSBASIC CONCEPTS

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