2015 National Economics Challenge, Semi-Finals Adam Smith, InternationalCurrent Events (Round III) - Test

2015 National
Economics Challenge,
Semi-Finals: Adam
Smith, International/
Current Events (Round
III)
Instructions:
This test consists of Round III of the National Economics Challenge Semi-finals quiz.
In this individual round you will have 20 minutes to complete 15 international/
current event questions
questions.
Once an answer has been selected, you must proceed with answering the
question. If your strategy depends on leaving some items unanswered, only select
an answer once you are sure that is how you would like to proceed.
LinkIt Test - 2015 National Economics Challenge, Semi-Finals: Adam Smith, International/ Page 1
Current Events (Round III) of 9
Once you have reviewed the instructions and are ready to proceed, select "Begin
Test" to get started. When you have completed the quiz, select the red stop sign
icon above to submit your quiz for grading.
Question 1. Question 2.
A hair stylist can gain from trading Which of the following statements is
with a restaurant chef: TRUE?
A. only if the hair stylist is A. A country's production

better than the restaurant possibilities curve is bowed
chef at producing haircuts. outward if it experiences
decreasing opportunity costs
B. only if the hair stylist is
of production.
better than the restaurant
chef at cooking meals. B. A product specific invention
can cause a production
C. only if another good or
possibilities curve to rotate
service (lawn maintenance,
by pivoting the curve around
for example) is offered by a
a fixed point on either the
third party.
vertical or horizontal axis.
D. even if neither the hair stylist
C. The production possibilities
nor the restaurant chef has a
curve of an industrialized
comparative advantage in
nation cannot shift inward
producing haircuts or
because there is no such
restaurant meals.
thing as a negative
E. even if the restaurant chef is technology shock.
better than the hair stylist at
D. A movement along a
producing haircuts.
production possibilities curve
occurs when inefficient
production becomes
efficient.
E. A country that shifts its

production possibilities curve
through economic growth
has eliminated scarcity.
In joining the Euro Zone, countries
Protectionist policies tend to: gave up their ability to:
A. protect foreign producers A. determine their own

selling in domestic markets. domestic monetary policy.
B. increase the selection of B. determine their own product

goods and services available safety standards.
to domestic consumers.
C. determine their own level of
C. increase the quantity of public debt.
world output.
D. make their own independent
D. cause domestic industries to decisions on the level of
face more competition from government spending.
foreign imports.
E. make their own independent
E. increase domestic prices. decisions on the level and
form of taxation in their
country.
Question 5.
For a country with a balanced budget
and a trade deficit, if an investment
boom is accompanied by little or no
increase in private saving, then:
A. interest rates will fall.
B. net exports will fall.
C. the price level will fall.
D. the money supply will fall.
E. the public debt will fall.
The PIIGS countries are noteworthy In international trade theory, the "law
for experiencing deep structural of one price" is most closely
economic problems that were associated with which economic
exacerbated by the recent world concept?
financial crisis. Of these countries,
A. Purchasing power parity
the two countries with the lowest
current (as of 2017) unemployment B. Fixed exchange rates
rates are _______ and the two
C. Intraindustry trade
countries that are experiencing the
highest unemployment rates are. D. Specialization
A. Portugal and Spain; Greece E. Mercantilism

and Italy
B. Greece and Spain; Ireland

and Portugal
C. Ireland and Italy; Portugal

and Spain
D. Ireland and Italy; Greece and

Spain
E. Portugal and Greece; Ireland

and Italy
The notion of convergence implies If the Federal Reserve is selling
that: existing government securities at the
same time they are purchasing euros
A. unemployment rates will
in foreign exchange markets, they
naturally converge to their
are attempting to:
natural rate level.
A. stimulate economic growth in
B. real interest rates converge
the U.S.
to their long-run level of
approximately 2 percent. B. stimulate economic growth in
the Euro Zone.
C. inflation will cause the real
value of government debt to C. contract the U.S. money
converge to 0 percent. supply with the hope of
lowering inflation rates.
D. countries will converge
toward the leading country's D. assist European monetary
level of real output per authorities in trying to do
capita. reduce the value of the euro.
E. the value of developing E. sterilize their intervention in

countries' currencies the foreign exchange market.
converge to a fixed rate of
exchange with the U.S.
dollar.
Over the twelve month period ending
March 1, 2015, which one of the
following countries saw its currency
depreciate by the largest percentage
relative to the U.S. dollar?
A. China
B. Japan
C. Greece
The above graphs represent a theory
of open economy equilibrium. How D. Russia
should the vertical axes be labeled? E. India
A. "f" is the real interest rate

and "g" is the real exchange
rate.
B. "f" is the real exchange rate

and "g" is the real interest
rate.
C. "f" is the real interest rate

and "g" is the nominal
exchange rate.
D. "f" is the real exchange rate

and "g" is the nominal
interest rate.
E. "f" is the nominal interest

rate and "g" is the real
exchange rate.
Over the past twelve months (as of Livingstonia Steubenia
the end of 2017), which of the
Cell Tablet Cell Tablet
following trends has been observed
Phones Compu Phones Compu
in the U.S. labor market?
ters ters
A. An increase in the share of 3,000 0 600 0
workers who have been
2,000 250 400 100
unemployed for 27 weeks or
more 1,000 500 200 200
B. A decrease in the number of 0 750 0 300

adults who are classified as
discouraged workers. Assume the two countries of
C. A decrease in the number of Livingstonia and Steubenia decide to
people employed. specialize in the production of the
good for which they have a
D. A decrease in average weekly comparative advantage and trade for
earnings. the other good. Which of the
E. An increase in the teenage following exchange ratios would be
unemployment rate. acceptable to both countries?
A. 1 cell phones for 1 tablet

computer
B. 3 cell phones for 1 tablet

computer
C. 5 cell phones for 1 tablet

computer
D. 1 cell phone for 5 tablet

computers
E. None of the above would

benefit both countries.
In recent years (as of 2017), the Traditional growth models suggest
share of national income earned by that an underdeveloped nation
those U.S. households that are in the undergoing a rapid increase in
top 1 percent of the income population growth will experience:
distribution is approximately which
A. a decrease in output and a
of the following?
decrease in output per
A. 10% capita.
B. 20% B. a decrease in output and an

increase in output per capita.
C. 30%
C. an increase in output and a
D. 40%
decrease in output per
E. 50% capita.
D. an increase in output and an

increase in output per capita.
E. no change in either output or

output per capita.

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2015 National

A. only if the hair stylist is A. A country's production

E. A country that shifts its

A. protect foreign producers A. determine their own

B. increase the selection of B. determine their own product

A. interest rates will fall.

B. net exports will fall.

C. the price level will fall.

D. the money supply will fall.

E. the public debt will fall.

A. Portugal and Spain; Greece E. Mercantilism

B. Greece and Spain; Ireland

C. Ireland and Italy; Portugal

D. Ireland and Italy; Greece and

E. Portugal and Greece; Ireland

E. the value of developing E. sterilize their intervention in

A. "f" is the real interest rate

B. "f" is the real exchange rate

C. "f" is the real interest rate

D. "f" is the real exchange rate

E. "f" is the nominal interest

B. A decrease in the number of 0 750 0 300

A. 1 cell phones for 1 tablet

B. 3 cell phones for 1 tablet

C. 5 cell phones for 1 tablet

D. 1 cell phone for 5 tablet

E. None of the above would

B. 20% B. a decrease in output and an

D. an increase in output and an

E. no change in either output or

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