Chapter 1 Ver 2 - IEI Practice Test Chapter 1 Instructor:...

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IEI Practice Test Chapter 1 Instructor: Song Gao MULTIPLE-CHOICE QUESTIONS 1. A main advantage of specialization results from: a. Economies of large-scale production b. The specializing country behaving as a monopoly c. Smaller production runs resulting in lower unit costs d. High wages paid to foreign workers 2. If a nation has an open economy, it means that the nation: a. Allows private ownership of capital b. Has flexible exchange rates c. Has fixed exchange rates d. Conducts trade with other countries 3. International trade forces domestic firms to become more competitive in terms of: a. The introduction of new products b. Product design and quality c. Product price d. All of the above 4. The movement to free international trade is most likely to generate short-term unemploy- ment in which industries? a. Industries in which there are neither imports nor exports b. Import-competing industries c. Industries that sell to domestic and foreign buyers d. Industries that sell to only foreign buyers 5. International trade is based on the idea that: a. Exports should exceed imports b. Imports should exceed exports c. Resources are more mobile internationally than are goods d. Resources are less mobile internationally than are goods 6. How much physical output a worker produces in an hour’s work depends on: a. The worker’s motivation and skill b. The technology, plant, and equipment in use c. How easy the product is to manufacture d. All of the above 7. Increased foreign competition tends to: a. Intensify inflationary pressures at home b. Induce falling output per worker-hour for domestic workers c. Place constraints on the wages of domestic workers d. Increase profits of domestic import-competing industries
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8. A firm’s ________, relative to that of other firms, is generally regarded as the most impor-
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This note was uploaded on 02/07/2012 for the course LGST 101 taught by Professor Hsu during the Spring '11 term at Singapore Management.

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Chapter 1 Ver 2 - IEI Practice Test Chapter 1 Instructor:...

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