1.The United States of America (USA) is an example of which of the following? A.
ID: 1092209 • Letter: 1
Question
1.The United States of America (USA) is an example of which of the following?
A.
free trade area
B.
political union
C.
economic union
D.
common market
2.The European Union (EU) is an example of which of the following?
A.
free trade area
B.
political union
C.
economic union
D.
common market
3.The North American Free Trade Agreement (NAFTA) is an example of which of the following?
A.
free trade area
B.
political union
C.
economic union
D.
common market
4.Which of the following is a feature of a common market?
Requires the use of a common currency among member nations
A.
Absence of a common external trade policy with regard to nonmembers
B.
Allows free movement of factors of production between member nations
C.
Establishment of barriers to the free flow of goods between member nations
D.
Lack of administrative machinery to oversee trade relations with nonmembers
5.An import tariff
a. lowers the domestic price of the exported good below the world price.
b. keeps the domestic price of the exported good the same as the world price.
c. raises the domestic price of the imported good above the world price
d. lowers the domestic price of the imported good below the world price.
6.Which two accounts are included in the balance of payments:
a. current account and the reserve account.
b. current account and the trade account.
c. current account and the capital account.
d. trade account and the capital account.
7.A producer has a comparative advantage in the production of a good, when the producer:
a. has a production cost that is less than sales revenue.
b. has the highest cost of production compared to any other producer.
c. is comparatively more efficient at producing the good than it is at producing anything else.
d. specializes through the use of an assembly line.
8.According to the Fischer effect, if the "real" rate of interest in a country is 4 percent and expected annual inflation is 9 percent, the "nominal" interest rate will be _____.
A.
5 percent
B.
13 percent
C.
9 percent
D.
36 percent
Explanation / Answer
B C A B (Allows free movement of factors of production between member nations( C (raises the domestic price of the imported good above the world price) C (current account and the capital account) C (is comparatively more efficient at producing the good than it is at producing anything else.) B (13%)
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