Proponents of a positive balance of trade believe it is essential to a state because it is a significant source of __________.

5-1 Quiz: Chapter Eight

Question 1 (2 points)

Proponents of a positive balance of trade believe it is essential to a state because it is a significant source of __________.

Question 1 options:

A) diplomacy
B) power
C) democracy
D) capitalism

Question 2 (2 points)

 Applying quotas on imports is a policy that would be followed by a __________.

Question 2 options:

A) bureaucracy
B) conspirator
C) free-market capitalist
D) protectionist state

Question 3 (2 points)

The balance of trade is the value of a state’s imports relative to its __________.

Question 3 options:

A) budget balance
B) trade status
C) exchange rate
D) exports

Question 4 (2 points)

A state that avoids trading altogether and instead tries to produce everything it needs by itself is following a strategy of __________.

Question 4 options:

A) mercantilism
B) economic liberalism
C) autarky
D) comparative advantage

Question 5 (2 points)

Which policy would be followed by a protectionist state?

Question 5 options:

A) imposing tariffs
B) dumping
C) eliminating export duties
D) disallowing quotas on imports

Question 6 (2 points)

A tariff is a type of tax imposed on __________ by a state.

Question 6 options:

A) luxury goods
B) revenues
C) imports
D) exports

Question 7 (2 points)

Tax breaks, loans, and guaranteed high prices are examples of what type of protectionism?

Question 7 options:


Question 8 (2 points)

A state will have a positive balance of trade, or trade surplus, when it __________.

Question 8 options:

imports a surplus of consumer goods
exports more than it imports
imports more than it exports
exports progressively more over a fiscal period

Question 9 (2 points)

How does economic liberalism compare with mercantilism?

Question 9 options:

Economic liberalism is not concerned with whether one state gains more or less than another, just whether the state’s wealth is increasing in absolute terms, whereas mercantilism emphasizes that each state must protect its own interests at the expense of others.
Economic liberalism emphasizes conflicting interests in economic exchanges, whereas mercantilism emphasizes shared interests.
Economic liberalism asserts that the most important goal of economic policy is the creation of the most favorable possible distribution of wealth, whereas mercantilism asserts that the most important goal is the maximum creation of total wealth.
Economic liberalism advocates a role for politics in market processes, whereas mercantilism advocates for market processes to be relatively unhindered by political elements.

Question 10 (2 points)

A __________ would agree that a government’s most useful role is to interfere in economics only to regulate markets in order to help them function efficiently. That is, politics should serve the interests of economic efficiency.

Question 10 options:


Question 11 (2 points)

The U.S. __________ exceeded $560 billion in 2017, with about a quarter accounted for by trade with China and another quarter by oil imports.

Question 11 options:

surplus of consumer goods
trade deficit
trade surplus
restricted free trade

Question 12 (2 points)

The mercantilist approach to trade is similar to __________.

Question 12 options:

economic liberalism

Question 13 (2 points)

With respect to deficits, __________.

Question 13 options:

a state cannot have a budget deficit and a trade deficit at the same time
if a state has a trade deficit, it must have a budget deficit
the concepts of budget deficit and trade deficit are used interchangeably
a state can have a trade deficit without having a budget deficit

Question 14 (2 points)

The WTO provides an overall framework for __________ trade in a worldwide market.

Question 14 options:


Question 15 (2 points)

Trade in services includes __________.

Question 15 options:

banking and insurance
telecommunications and arms
tourism and textiles
aerospace and computer technology

Question 16 (2 points)

The most profitable goods involved in illicit trade are __________.

Question 16 options:

gaming software and sound recordings
pharmaceuticals and weapons
weapons and drugs
drugs and DVD films

Question 17 (2 points)

Enforcement of trade agreements __________.

Question 17 options:

takes place under universal agreement on what is fair trade
depends on reciprocity
usually involves the United Nations Economic and Social Council
is ensured mostly by the United States and China

Question 18 (2 points)

The largest, and most comprehensive, regional free-trade area is in __________.

Question 18 options:

North America
South America

Question 19 (2 points)

Cartels form to __________ the price of a certain product, and most often __________ production by each member so as to lower supply.

Question 19 options:

manipulate; inflate
reduce; inflate
manipulate; limit
inflate; reduce

Question 20 (2 points)

The most prominent cartel in the international economy is the __________.

Question 20 options:

International Energy Agency
Organization of the Petroleum Exporting Countries
North American Free Trade Agreement
Free Trade Area of the Americas

Question 21 (2 points)

The __________ oversees the world’s most important multilateral agreement on intellectual property.

Question 21 options:

United Nations
World Intellectual Property Organization
World Trade Organization
United States

Question 22 (2 points)

Retaliation for cases of dumping usually comes in the form of __________.

Question 22 options:

dumping in the offending state’s market
quotas on the products being dumped
tariffs to raise the price back to market levels
subsidies for those companies being harmed

Question 23 (2 points)

The principle that whenever a WTO member state lowers tariffs on certain kinds of imports from one member state, all member states are entitled to the same treatment with regard to their goods is known as the __________ concept.

Question 23 options:

most-favored nation
Generalized System of Preferences
economic nationalism
General Agreement on Tariffs and Trade

Question 24 (2 points)

A customs union is created when states __________ members of the group.

Question 24 options:

decide to reduce trade barriers and adopt a common tariff toward states that are not
decide to reduce trade barriers for each other and maintain individual tariffs toward states that are not
achieve the free movement of goods, services, capital, and labor among the
adopt a common currency to be adopted by all

Question 25 (2 points)

By the beginning of the twentieth century, __________ replaced __________ as the state with the world’s largest and most advanced economy.

Question 25 options:

Germany; France
Japan; the United States
the United States; Britain
Britain; Germany

Question 26 (2 points)

The Soviet Union set prices and quotas for production and consumption of commodities, following communist principles. This approach to economics is an example of a __________ economy.

Question 26 options:

centrally planned
locally planned

Question 27 (2 points)

Which statement is true about the capitalist world economy immediately after World War II?

Question 27 options:

The United States provided major assistance to rebuild Western Europe and Japan.
World trade declined as countries focused on rebuilding their domestic economies.
The Soviet Union and Eastern Europe began their transition to capitalism.
The capitalist world economy was restructured under joint U.S.-British-French leadership.

Question 28 (2 points)

Which feature is characteristic of a centrally planned economy?

Question 28 options:

Government officials set prices.
Religious authorities decide production quotas.
Consumers have a wide range of products from which to choose.
Governments cannot guarantee the basic needs of citizens.

Question 29 (2 points)

Which factor contributed to the industrialization of the United States?

Question 29 options:

limited natural resources as a result of territorial expansion
conversion from imported oil to domestic coal as a primary energy source
new technical innovations, such as electricity and airplanes
small numbers of immigrants coming to work in the United States

Question 30 (2 points)

The world economy is __________ integrated on a global scale, generating wealth at a(n) __________ pace.

Question 30 options:

decreasingly; decelerating
increasingly; accelerating
decreasingly; accelerating
increasingly; decelerating

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