c. Political tensions reduce the level of trade between the two countries.
d. The United States has banned food imports from Russia.
ANSWER: c
60. A trade embargo leads to
a. a trade deficit.
b. a restriction on exports to foreign countries.
c. a halt in all kinds of trading activities.
d. sanctions or complete elimination of imports from a foreign country.
ANSWER: d
61. One way to gauge the impact of trade on a nation is to measure:
a. wage distortions and job loss.
b. the ratio of total imports and exports expressed as a percentage of a nation's GDP.
c. shipping costs.
d. increases in national income due to trade.
ANSWER: b
62. The ratio of a country’s trade to GDP is measured by:
a. the ratio of the trade balance to the country’s GDP.
b. the ratio of the trade surplus to the country’s GDP.
c. the ratio of the value of imports and exports (for goods and services) to the country’s GDP.
d. the ratio of the average value of imports and exports (for goods and services) to the country’s GDP.
ANSWER: d
63. Which of the following is NOT included in the calculation of a country's gross domestic product (GDP)?
a. the value of all its intermediate goods produced in a year
b. the value of all its exports produced in a year
c. the value of all its final consumption goods produced in a year
d. All of these are included in the calculation of a country's gross domestic product.
ANSWER: a
64. If a country's GDP is $10 trillion, its exports are $1 trillion, and its imports are $1.5 trillion, then its trade/GDP ratio is:
a. 10%.
b. 12.5%.
c. 25%.
d. 400%.
ANSWER: b
65. Which of the following statements about the ratio of total trade to GDP is true?
a. Larger nations tend to have higher trade/GDP ratios.
b. Total trade is always larger than GDP.
c. GDP is always larger than total trade.
d. Countries with higher trade/GDP ratios tend to be smaller.
ANSWER: d
66. What does a country's gross domestic product (GDP) measure?
a. the value of all intermediate goods produced in a year
b. the value of all exports produced in a year
c. the value of all final goods produced in a year
d. the value of all production in a year
ANSWER: c
67. If a country's GDP is $10 trillion and its overall trade flows are $2 trillion (imports + exports/2), then:
a. its trade/GDP ratio is 20%.
b. it is not a successful country.
c. its GDP needs to increase.
d. its trade/GDP ratio is too high.
ANSWER: a
68. If a country's trade/GDP ratio is 38% and the GDP is $500 billion, then what is the overall value of its trade (imports + exports/2)?
a. $390 billion
b. $190 billion
c. $100 billion
d. Not enough information is provided to answer the question.
ANSWER: b
69. If the trade/GDP ratio is 25% and the overall value of trade (imports + exports/2) is $175 billion, then the GDP is:
a. $250 billion.
b. $700 billion.
c. $1 trillion.
d. $0.5 trillion.
ANSWER: b
70. In 2018, the U.S. trade/GDP ratio was:
a. the highest in the industrialized world.
b. greater than China's and Japan's.
c. smaller than that of Germany.
d. too high.
ANSWER: c
71. If we measure the ratio of total trade to GDP, which of the following nations had the highest ratio in 2018?
a. Hong Kong (China)
b. Japan
c. Germany
d. the United States
ANSWER: a
72. Which of the following countries had the highest ratio of international trade to GDP in 2018?
a. the United States