Sample Final Key

Sample Final Key - ARE 138.f NAME Section A consists of 13...

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ARE 138 NAME: _ Section A consists of 13 multiple choice questions worth 10 points each. "' .f Section B consists of 8 problems worth 40 points each. Please show your work for full credit. Ifyou can't solve one step ofa problem, you can still get credit for the remainder ifyou use the correct method. Total points possible = 450.
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Part I. Multiple choice (10 points each) 1. Many critics have charged that GOP (gross domestic product) is an inadequate and misleading indicator ofeconomic progress. What is the basis for this criticism? a. GOP does not adjust for negative externalities that may be caused by economic activities. b. GOP does not account for depletion ofnatural resources used in production. a~Both a and b. 'a:' Neither a nor b. 2. Suppose Country X has been accused ofdumping rice in the world market. What action by country X might have led to this charge?' a. Country X recently began a domestic quota program for rice. b. Country X recently established a rice support price for its producers, in which excess rice is purchased by the government and sold abroad. c. Country X recently imposed an export tariffon rice. ® Either a or b. e. Either a, b, or c. 3. Tony recently noticed that Brazilian government bonds are yielding 10% interest/year, while US government bondsareyielding only 2%. He decidesto exchange his dollars for Brazilianreals (the Brazilian unit of currency), invest in Brazil, then exchange the proceeds back into dollars at the end of the year. Today's exchange rate is eo = 2.25 reals per dollar. What possibility should Tony consider in choosing this strategy? (cl)The exchange rate is likely to rise above 2.25 reals/dollar by the end ofthe year. Y The exchange rate is likely to fall below 2.25 reals/dollar by the end ofthe year. c. The US is likely to experience higher inflation than Brazil during the upcoming year. d. None ofthe above. 4. What controversial environmental problem has been associated with shrimp harvesting in recent years? a. Killing ofdolphins. b. Mercury contamination from spilled fuel. C9 Drowning ofsea turtles. d. All ofthe above. 5. Which ofthe following is NOT an actual international incident that has been in the news recently? a. US sailors battled Chinese sailors with water hoses, due to territorial dispute. b. US politicians accused Asian shrimp producers ofabusive labor conditions. (C:\ US banned importation ofMexican pineapples due to alleged infestation by insect pests. Y All ofthe above are actual recent news events. e. None ofthe above are actual recent news events. 6. Which ofthe commodities below is SUbject to import quotas imposed by the US? a. Gold b. Broccoli and cauliflower @Cheese d. Crude oil e All ofthe above.
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7. What agricultural policy has the US government employed in recent years for grains, such as wheat?
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Sample Final Key - ARE 138.f NAME Section A consists of 13...

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