Macroeconomics 9th Edition Colander Test Bank Full Chapter PDF

Macroeconomics 9th Edition Colander
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Chapter 08
Comparative Advantage, Exchange Rates, and Globalization
True / False Questions
1. The United States has a trade deficit when the value of the goods and services we import
exceeds the value of the goods and services we export.
True False
2.
We can conclude from the table shown that Spain has a comparative advantage in the
production of tables.
True False
3.
We can conclude from the table shown that Morocco has a comparative advantage in the
production of tables.
True False
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4. A currency has depreciated in value if it takes more of a foreign currency to buy it.
True False
5. Economic models take into account the effect of trade on the distribution of income.
True False
6. People with intellectual property rights are on the low end of the income distribution that is
created from globalization.
True False
7. Manufacturing wages have risen significantly for 20 years.
True False
8. The more competition there is in international trade, the larger the traders' proportion of the
gains from trade.
True False
9. Smaller countries tend to get a larger share of the gains from trade than do larger countries.
True False
10. If Americans demand goods produced in Mexico, it leads to a demand for Mexican pesos and
a supply of U.S. dollars on the foreign exchange market.
True False
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Multiple Choice Questions
11. Suppose foreign shrimp prices drop by 32 percent and importers gain a 90 percent market
share. From this information, what would economists strongly suspect about this industry?
A. Foreigners have a comparative advantage in shrimping.
B. Americans have a comparative advantage in shrimping.
C. Foreign sellers probably are colluding on price to maximize profits.
D. The large sales of foreigners indicate that they are better strategic bargainers than
Americans are.
12. Immediately after World War II, the United States ran trade:
A. deficits and was an international lender.
B. deficits and was an international borrower.
C. surpluses and was an international lender.
D. surpluses and was an international borrower.
13. The balance of trade measures the:
A. difference between the value of imports and that of exports.
B. share of U.S. imports coming from various regions of the world.
C. share of U.S. exports going to various regions of the world.
D. exchange rate needed to make imports equal exports.
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14. The U.S. balance of trade has:
A. shown a surplus since the 1980s.
B. been in deficit since the 1980s.
C. gone from a surplus in the 1980s to a deficit in the 1990s and back to a surplus since 2000.
D. gone from a deficit in the 1980s to a surplus in the 1990s and back to a deficit since 2000.
15. When a country runs a trade deficit, it does so by:
A. borrowing from foreign countries or selling assets to them.
B. borrowing from foreign countries or buying assets from them.
C. lending to foreign countries or selling assets to them.
D. lending to foreign countries or buying assets from them.
16. When a country runs a trade surplus, it will:
A. borrow from foreign countries or sell assets to them.
B. borrow from foreign countries or buy assets from them.
C. lend to foreign countries or sell assets to them.
D. lend to foreign countries or buy assets from them.
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17.
Refer to the table shown. From this table we can conclude that:
A. France has a comparative advantage in both goods.
B. France has a comparative advantage in wine and Germany has a comparative advantage in
electric generators.
C. Germany has a comparative advantage in wine and France has a comparative advantage in
electric generators.
D. Germany has a comparative advantage in both goods.
18.
Refer to the table shown. From this table we can conclude that if the two countries trade with
each other, it is most likely that:
A. France exports both goods to Germany.
B. Germany exports both goods to France.
C. France exports wine to Germany and imports electric generators from Germany.
D. France exports electric generators to Germany and imports wine from Germany.
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19. Countries can expect to gain from international trade as long as they:
A. keep production diversified.
B. specialize according to their comparative advantage.
C. produce only those goods for which they have a relatively high opportunity cost.
D. use trade restrictions to reduce competition for domestic producers.
20. Specialization according to comparative advantage means that a country is producing the
goods:
A. that it wants to consume.
B. for which it has a relatively high opportunity cost.
C. for which it has a relatively low opportunity cost.
D. that it can produce at zero cost.
21. Globalization represents:
A. a return to isolationism.
B. the opposite of isolationism.
C. the economic complement of political isolationism.
D. the political complement of economic isolationism.
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22. Assume that in Canada the opportunity cost of producing one television set is two bushels of
wheat. Assume that in the United States the opportunity cost of producing one bushel of
wheat is two television sets. If these two countries specialize according to comparative
advantage and then trade with each other:
A. Canada will export both televisions and wheat.
B. Canada will export wheat and import televisions.
C. the United States will export wheat and import televisions.
D. the United States will export both televisions and wheat.
23. Assume that in Canada the opportunity cost of producing one television set is two bushels of
wheat. Assume that in the United States the opportunity cost of producing one bushel of
wheat is two television sets. If these two countries specialize according to comparative
advantage and then trade with each other:
A. Canada will import both televisions and wheat.
B. Canada will import wheat and export televisions.
C. the United States will import wheat and export televisions.
D. the United States will import both televisions and wheat.
24. A nation's comparative advantage in the production of an item is determined by:
A. which country has already specialized in the production of the item.
B. the total and marginal costs of producing the item.
C. the opportunity cost of producing the item relative to a trading partner's opportunity cost.
D. wage rates and other input costs.
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25. If nations trade on the basis of comparative advantage:
A. a nation usually can gain from trade only at the expense of its trading partners.
B. exporting nations gain from trade and importing nations lose.
C. importing nations gain from trade and exporting nations lose.
D. all trading partners can gain from trade.
26. At one time, most of the cars produced in Mexico were sold in Mexico. Today, however,
Mexico both exports and imports cars. How can comparative advantage explain these data?
A. It cannot; comparative advantage predicts that a country either exports a product or

imports it, not both.
B. The pattern is not due to comparative advantage but to government restrictions on

production.
C. Mexico has a comparative disadvantage in automobiles.
D. Mexico specializes in the production of high-end cars, which it exports, and imports low-
end cars that can be produced at lower cost elsewhere.
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27. Production Possibility Schedules for Two South Pacific Island Nations
Refer to the table shown. In Kiribati, the opportunity cost of producing one mango (in terms
of coconuts) is:
A. 0.
B. 1/4.
C. 4.
D. 400.
Refer to the table shown. In Tuvalu, the opportunity cost of producing one coconut (in terms
of mangoes) is:
A. 0.
B. 1/3.
C. 3.
D. 400.
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Refer to the table shown. A comparative advantage in the production of mangoes is held by:
A. Kiribati.
B. Tuvalu.
C. both countries.
D. neither country.
Refer to the table shown. A comparative advantage in the production of coconuts is held by:
A. Kiribati.
B. Tuvalu.
C. both countries.
D. neither country.
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Refer to the table shown. Which of the following statements is true?
A. Gains from trade are possible for both countries.
B. Only Kiribati will benefit from trade with Tuvalu.
C. Only Tuvalu will benefit from trade with Kiribati.
D. No gains from trade are possible for either Kiribati or Tuvalu.
32. The country with a comparative advantage in the production of good X is the one that:
A. has the greatest technical efficiency in producing good X.
B. has the greatest supply of the natural resources used in producing good X.
C. can produce good X with the least labor.
D. can produce good X at the lowest opportunity cost.
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33.
Refer to the table shown. Botswana's opportunity cost of producing nickel (in terms of gold)
is:
A. 3/5.
B. 5/3.
C. 60.
D. 100.
34.
Refer to the table shown. A comparative advantage in the production of gold is held by:
A. Zimbabwe.
B. Botswana.
C. neither country.
D. both countries.
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35.
Refer to the table shown. In this example:
A. there are gains from trade for Botswana.
B. there are gains from trade for Zimbabwe.
C. there are gains from trade for both countries.
D. there are no possible gains from trade.
36. If the United States were to stop trading with other nations, economists would predict that in
the long run the United States would end up with:
A. more jobs.
B. lower prices.
C. a higher standard of living.
D. a lower standard of living.
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37.
Refer to the graph shown. We can conclude from the diagram that:
A. Graustark has a comparative advantage in both goods.
B. Norstrilia has a comparative advantage in both goods.
C. Norstrilia has a comparative advantage in manufacturing and Graustark has a comparative

advantage in agriculture.
D. Norstrilia has a comparative advantage in agriculture and Graustark has a comparative

advantage in manufacturing.
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38.
Refer to the graph shown. We would expect that if the two countries trade with each other
(and neither trades with the rest of the world):
A. Norstrilia will export manufactured goods and Graustark will export agricultural goods.
B. Norstrilia will export agricultural goods and Graustark will export manufactured goods.
C. Norstrilia will export both goods to Graustark, which will have a permanent trade deficit.
D. Graustark will export both goods to Norstrilia, which will have a permanent trade deficit.
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39.
Refer to the graph shown. Given these production possibility curves, you would suggest that:
A. Country A should specialize in widgets and Country B in wadgets.
B. No trade should take place.
C. Country A should specialize in wadgets and Country B in widgets.
D. Both countries should produce an equal amount of each.
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40.
Refer to the graph shown. The graph demonstrates Saudi Arabia's and the United States'
production possibility curves for widgets and wadgets. Given these production possibility
curves, you would suggest that:
A. Saudi Arabia specialize in widgets and the United States in wadgets.
C. Saudi Arabia specialize in wadgets and the United States in widgets.
41. If a nation has a comparative advantage in the production of good X then:
A. It can produce good X at the lowest opportunity cost.
B. It will import good X.
C. It can produce more of good X than any other nation.
D. The opportunity cost of producing an additional unit of good X is greater than for any other
nation.
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42. A widget has an opportunity cost of 4 wadgets in Saudi Arabia and 2 wadgets in the United
States. Given these opportunity costs, you would suggest that:
A. Saudi Arabia specialize in widgets and the United States in wadgets.
C. Saudi Arabia specialize in wadgets and the United States in widgets.
43. Country A's cost of widgets is $4.00 and cost of wadgets is $8.00. Country B's cost of widgets
is 8 euros and cost of wadgets is 16 euros. Which of the following would you suggest?
A. Country A should specialize in widgets and Country B in wadgets.
B. Trade of widgets for wadgets would not benefit the countries.
C. Country A should specialize in wadgets and Country B in widgets.
44. In considering the distribution of the gains from trade:
A. Smaller countries usually get a larger proportion of the gains from trade.
B. Larger countries usually get a larger proportion of the gains from trade.
C. The gains are generally split equally between small and large countries.
D. No statement can be made about the general nature of the split.
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45. The analysis of international trade suggests that trading companies earn higher than normal
profits in:
A. the long run but not in the short run.
B. the short run but not in the long run.
C. both the short run and the long run.
D. neither the short run nor the long run.
46. The U.S. textile industry is relatively small because the United States imports most of its
clothing. A clear result of the importation of clothing is that:
A. there is less variety available than there would be without imports.
B. the quality of clothing is lower than it would be without imports.
C. the price of clothing is higher than it would be without imports.
D. the price of clothing is lower than it would be without imports.
47. Which of the following statements correctly summarizes a difference between the layperson's
and the economist's views of the net benefits of trade?
A. Economists often argue that the gains from trade in the form of low consumer prices tend
to be widespread and not easily recognizable while the costs in jobs lost tend to be
concentrated and readily identifiable.
B. Economists often argue that most U.S. jobs are at risk of outsourcing while laypeople
intuitively recognize that inherent in comparative advantage is that each country has a
comparative advantage in the production of some good.
C. Economists focus on trade in manufactured goods while laypeople also focus on trade
involving the services of people who manage the trade.
D. Economists most often argue that the costs of trade outweigh the benefits while laypeople
often argue that the benefits of trade outweigh the costs.
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48. In the United States, globalization has caused workers in the education, healthcare, and
government sectors to face:
A. Lower wages.
B. Higher prices on consumer goods.
C. Little or no downward pressure on their wages.
D. Longer hours to compete with the higher production levels abroad.
49. When Ross Perot ran for president as a third party candidate in 1992, he argued that free
trade with Mexico would result in massive job losses in the United States because Mexican
wages were so low. Which of the following is the best explanation of why few economists
agreed with Perot?
A. Economists did not believe that any jobs would be lost in the United States.
B. Economists believed that the U.S. unemployment rate would rise.
C. Although economists agreed that in some areas the United States would lose jobs, they
expected that the United States would gain jobs in other areas.
D. Although economists predicted that unemployment would rise, the increased profits of
corporations would raise stock prices enough to compensate for the lost jobs.
50. Economists and laypeople see the pros and cons of international trade in different ways.
Which of the following is one of those ways?
A. Laypeople enjoy the benefits of trade in terms of lower consumer prices.
B. Laypeople believe in the law of one price and economists do not.
C. Laypeople tend to think of foreign trade only in terms of manufactured goods.
D. Laypeople recognize that the United States has a comparative advantage in services.
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51. The loss of jobs due to international trade is often:
A. more visible than the decline in consumer prices due to international trade.
B. less visible than the decline in prices due to international trade.
C. greater than the benefit of trade in the form of decline in prices.
D. spread across all sectors while decline in prices is concentrated in one sector.
52. When considering outsourcing, most laypeople:
A. recognize its benefits to raising foreign wages.
B. oppose it because of the visible loss of jobs.
C. support it because they enjoy lower consumer prices.
D. recognize it frees resources for other jobs for which the U.S. has a comparative advantage.
53. Most economists:
A. focus on the costs of international trade and discount its benefits in lower consumer
prices.
B. include the effects of trade on the distribution of income.
C. recognize both the costs of international trade in lost jobs and the benefits in terms of
lower prices.
D. support free trade because it raises the wages of those in countries who can hardly meet
their basic needs.
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54. Most laypeople:
A. fear that the United States is losing its comparative advantage in all goods.
B. don't see the effect of trade on the distribution of income.
C. recognize both the costs of international trade in lost jobs and the benefits in terms of
lower prices.
D. recognize that if China has a comparative advantage in one good, the United States has a
comparative advantage in another good.
55. The fact that the United States has a trade deficit means that:
A. the United States is producing more than it is consuming.
B. foreign countries can have comparative advantages in all goods.
C. foreign countries can have comparative advantages in more goods compared to the United
States.
D. the United States is lending more to foreign countries than it is borrowing from foreign
countries.
56. When countries decide they will no longer buy U.S. assets or lend to the United States:
A. adjustments will be set in motion to equalize comparative advantages.
B. adjustments will be set in motion so that the U.S. has more comparative advantages.
C. the United States can begin to run a trade deficit.
D. The is no reason foreign countries will not want to buy more U.S. assets than the U.S. buys
of foreign assets.
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57. Economists:
A. are not concerned with the distributional effects of trade.
B. cannot measure the distributional effects of trade.
C. do not generally include the distributional effects of trade in their models.
D. disagree with laypeople that the distributional effects of trade are important.
58. What percent of all jobs in the United States are in manufacturing?
A. 10 percent.
B. 30 percent.
C. 50 percent.
D. 70 percent.
59. Which of the following puts downward pressure on U.S. manufacturing wages?
A. A declining value of the dollar.
B. Rising foreign wages.
C. Technological innovation.
D. Immigration.
60. The group that benefited the most from international trade has been people who:
A. financed international trade.
B. managed firms.
C. owners of firms.
D. No one has benefited.
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61. Workers in education, health care and government sectors have:
A. seen their incomes fall just like in manufacturing.
B. been mostly hurt from globalization.
C. benefited from globalization in terms of lower consumer prices.
D. been hurt because the sector has been shrinking.
62. In the United States globalization has:
A. played a significant role in growing income disparity because some sectors have benefited
and others have not.
B. played little role in growing income disparity because all Americans are consumers who
have enjoyed lower prices.
C. played a significant role in growing income disparity because foreign workers' incomes
have risen.
D. played little role in growing income disparity because while some jobs were lost, the gain
in jobs balanced out those that were lost.
63. On average, globalization has:
A. been insignificant.
B. left Americans no better or not worse off.
C. hurt Americans.
D. benefited Americans.
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64. Why are the gains from trade often difficult to recognize?
A. The United States does not keep accurate records of employment.
B. The gains are spread out over a wide variety of goods and consumers.
C. There are no gains from trade.
D. The gains are in services, which are difficult to measure.
65. The decline in the price of American goods is due in part to:
A. agglomeration effects of firms.
B. declines in productivity.
C. trade barriers that allow domestic firms to lower prices.
D. globalization and increased trade.
66. A common economically unfounded fear held by laypeople is that:
A. globalization will result in the United States losing most jobs because wages are so much
higher in the United States.
B. globalization will result in dramatically higher prices because most services will be
outsourced.
C. the United States has a comparative advantage in the production of all goods.
D. a U.S. trade surplus will result in a dramatically lower dollar.
67. The United States imports:
A. only manufactured goods.
B. only services.
C. neither manufactured goods nor services.
D. both manufactured goods and services.
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68. How are goods manufactured in other countries creating jobs in the United States?
A. People whose jobs were outsourced are now discouraged workers.
B. U.S. firms are specializing in managing the trade of these goods.
C. Foreign countries are importing U.S. natural resources.
D. People who have lost jobs have more time to shop and therefore increase demand for
goods.
69. The text mentions 10 sources of U.S. comparative advantage. Which of the following is not
one of them?
A. A large military
B. Skills of the labor force
C. A stable government
D. An extensive physical and technological infrastructure
one of them?
A. Wealth from past production
B. The fact that English is the international language of business
C. A high ratio of lawyers to the population
D. Extensive natural resources
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one of them?
C. U.S. natural resources
D. Weak environmental protection laws
one of them?
C. A substantial policy to limit immigration
D. Extensive natural resources
one of them?
A. Relatively open immigration laws
B. Religious diversity
C. Skills of the U.S. labor force
D. A large stock of intellectual property rights
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74. One of the 10 sources of U.S. comparative advantage mentioned in the text is:
A. religious diversity.
B. a large military.
C. a high ratio of lawyers to the population.
D. stable U.S. government institutions.
75. When people talk about U.S. intellectual property rights, what are they talking about?
A. The existence of high-quality educational institutions such as the Ivy League schools
B. Ideas and knowledge protected by patents and copyrights
C. The human capital of the U.S. labor force
D. The abstract nature of ownership in corporate organizations
76. The text calls the type of comparative advantage that is not easily changed, such as climate:
A. stable comparative advantage.
B. inherent comparative advantage.
C. equilibrium comparative advantage.
D. permanent comparative advantage.
77. The text refers to the type of comparative advantage that can be gained or lost because of
changes in skills of workers or types of capital as:
A. unstable comparative advantage.
B. transferable comparative advantage.
C. nonequilibrium comparative advantage.
D. temporary comparative advantage.
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78. When comparative advantage is based on transferable factors, the law of one price tends to:
A. erode the advantage away.
B. amplify the advantage.
C. stabilize the advantage.
D. make the advantage into an inherent comparative advantage.
79. Transferable comparative advantages are:
A. Based on factors that are relatively unchangeable.
B. Based on factors that can change relatively easily.
C. Becoming more like inherent comparative advantages with technological innovations.
D. Rarely eroded over time.
80. Which of the following is eroding the U.S. comparative advantage?
A. The spread of technology.
B. The law of one price.
C. A depreciating dollar.
D. Intellectual property rights.
81. What economists call the law of one price depends on:
A. government action.
B. people seeking to exploit profit opportunities.
C. random chance.
D. the inertia effect.
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82. The price of an acre of land in rural Nevada is a few hundred dollars. The price of an acre of
land in downtown New York is many millions of dollars. How does the law of one price
explain this difference?
A. It cannot; there are unexplainable exceptions to the law of one price.
B. It suggests that in the long run price of land will be equalized regardless of location.
C. The law of one price depends on the mobility of resources, but location by its very nature
cannot be mobile.
D. The law of one price applies only to resources involved in international trade.
83. Suppose that the U.S. dollar buys 100 Japanese yen, gold costs $500 per ounce in New York,
and gold costs 20,000 yen per ounce in Tokyo. What does the law of one price predict will
happen?
A. Nothing will happen.
B. Traders will avoid the U.S. market and exchange only in Tokyo, where the price of gold is
lower.
C. Traders will buy gold in the United States and sell it in Japan.
D. Traders will buy gold in Japan and sell it in the United States.
84. The foreign exchange rate is the rate at which:
A. taxes are imposed on foreign imports.
B. foreign good are traded between domestic consumers.
C. one country's currency can be traded for another country's currency.
D. immigrants are exchanged between countries.
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85. If the euro rises in price, it becomes:
A. cheaper for Americans to buy European products and cheaper for Europeans to buy
American products.
B. cheaper for Americans to buy European products but more expensive for Europeans to buy
American products.
C. more expensive for Americans to buy European products but cheaper for Europeans to buy
American products.
D. more expensive for Americans to buy European products and more expensive for
Europeans to buy American products.
86. If 1 Canadian dollar costs 0.60 U.S. dollar, 1 U.S. dollar costs:
A. 0.40 Canadian dollar.
B. 0.60 Canadian dollar.
C. 1.40 Canadian dollars.
D. 1.67 Canadian dollars.
87. The Mexican demand for American goods leads to:
A. the demand for Mexican pesos and the supply of U.S. dollars on the foreign exchange
market.
B. the demand for U.S. dollars and the demand for Mexican pesos on the foreign exchange
market.
C. the demand for U.S. dollars and the supply of Mexican pesos on the foreign exchange
market.
D. the demand for U.S. dollars and the supply of U.S. dollars on the foreign exchange market.
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88. If civil war broke out in China, causing interest rates and income to drop:
A. the demand for yuan would decrease and the supply of yuan would increase.
B. the demand for yuan would increase and the supply of yuan would increase.
C. the demand for yuan would decrease and the supply of yuan would decrease.
D. the demand for yuan would increase and the supply of yuan would decrease.
89.
In the graph below, the value of the dollar is:
A. appreciating because the dollar buys more yuan.
B. depreciating because the dollar buys more yuan.
C. appreciating because the dollar buys fewer yuan.
D. depreciating because the dollar buys fewer yuan.
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90.
All of the following would cause the yen (currency of Japan) to appreciate except:
A. the discovery of a vegetable only grown in Japan that could be used as biofuel.
B. increased interest rates on Japanese financial assets.
C. a decrease in Japanese income.
D. a new, global trend for Japanese sushi.
91. Americans buying Japanese cars:
A. demand U.S. dollars and supply Japanese yen.
B. demand U.S. dollars and demand Japanese yen.
C. supply U.S. dollars and demand Japanese yen.
D. supply both U.S. dollars and Japanese yen.
92. The foreign exchange market is the market in which:
A. foreigners buy U.S. real estate.
B. foreign stocks and bonds are bought and sold.
C. ideas from different countries are exchanged.
D. currencies of different countries are bought and sold.
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93. Which of the following exchange rates between the dollar and the peso would a Mexican
buyer of American goods most prefer?
A. $0.25 = 1 peso
B. $0.20 = 1 peso
C. $0.15 = 1 peso
D. $0.05 = 1 peso
94. In a foreign exchange market diagram with dollars per peso on the vertical axis, the quantity
of __________ would be on the horizontal axis and the U.S. demand for Mexican goods would
help to determine the __________ curve.
A. dollars; demand
B. dollars; supply
C. pesos; demand
D. pesos; supply
95. If the U.S. dollar appreciates against the Japanese yen:
A. U.S. goods will be cheaper for Japanese consumers.
B. Japanese goods will be more expensive in the United States.
C. the U.S. dollar will buy fewer Japanese yen.
D. Japanese goods will be cheaper in the United States.
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96. The supply of euros on the foreign exchange market slopes:
A. upward because European consumers buy fewer foreign goods when the value of the euro
decreases.
B. upward because European consumers buy more foreign goods when the value of the euro
decreases.
C. downward because European consumers buy fewer foreign goods when the value of the
euro decreases.
D. downward because European consumers buy more foreign goods when the value of the
euro decreases.
97. The demand for euros on foreign exchange markets slopes:
A. upward because foreign consumers buy fewer European goods when the value of the euro
increases.
B. upward because foreign consumers buy more European goods when the value of the euro
increases.
C. downward because foreign consumers buy fewer European goods when the value of the
euro increases.
D. downward because foreign consumers buy more European goods when the value of the
euro increases.
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98.
Refer to the graph shown. If the price of shekels is $1.10, the quantity of shekels supplied is:
A. greater than the quantity demanded. This causes the shekel to gain value.
B. less than the quantity demanded. This causes the shekel to gain value.
C. greater than the quantity demanded. This causes the shekel to lose value.
D. less than the quantity demanded. This causes the shekel to lose value.
99.
Refer to the graph shown. If the price of shekels is $0.90, the quantity of shekels supplied is:
A. greater than the quantity demanded. This causes the shekel to gain value.
B. less than the quantity demanded. This causes the shekel to gain value.
C. greater than the quantity demanded. This causes the shekel to lose value.
D. less than the quantity demanded. This causes the shekel to lose value.
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100.If Americans suddenly wanted European products because they were deemed more
fashionable, the:
A. demand curve for the euro would shift right.
B. demand curve for the euro would shift left.
C. supply curve for the euro would shift right.
D. supply curve for the euro would shift left.
101.Which of the following would cause the supply curve for euros to shift left?
A. Americans want to buy more European goods.
B. Americans want to buy fewer European goods.
C. Europeans want to buy more American goods.
D. Europeans want to buy fewer American goods.
102.Which of the following would cause the supply curve for euros to shift right?
103.Which of the following would cause the demand curve for euros to shift right?
8-37
104.Which of the following would cause the demand curve for euros to shift left?
105.In the early 2000s, Europeans saw the United States as a big half-off sale. European visitors
to the United States were enjoying shopping for many items that were much more expensive
in Europe. Which of the following could have led to this shopping spree?
A. Inflation in the United States
B. Low interest rates in the United States
C. A rise in the dollar price of the euro
D. A rise in U.S. GDP
8-38
106.
Refer to the graph shown. Other things equal, an increase in U.S. income will shift the supply
of dollars from:
A. S1 to S0, causing the price per dollar to fall.
B. S1 to S0, causing the price per dollar to rise.
C. S0 to S1, causing the price per dollar to fall.
D. S0 to S1, causing the price per dollar to rise.
107.The discovery of a new source of oil will lead to:
A. increased demand for another currency; appreciation of the currency.
B. increased demand for domestic currency; depreciation of the currency.
C. decreased demand for domestic currency; appreciation of the currency.
D. increased demand for domestic currency; appreciation of the currency.
8-39
108.
In the graph shown, the country has a trade:
A. deficit.
B. surplus.
C. balance.
D. appreciation.
109.If the United States' price level is below the world price level, all of the following would be
successful in raising the world price (supply) level except:
A. the dollar appreciating.
B. the U.S. gaining a comparative advantage.
C. wages in the U.S. falling.
D. the value of U.S. assets falling.
8-40
110.
If the world supply curve is SW0,
A. there is a trade deficit.
B. there is a trade surplus.
C. trade is in balance.
D. there is no trade.
8-41
111.
A. domestic quantity supplied is unrelated to domestic quantity demanded.
B. domestic quantity supplied is less than domestic quantity demanded.
C. domestic quantity supplied exceeds domestic quantity demanded.
D. domestic quantity supplied equals domestic quantity demanded.
8-42
112.
A. there is a trade deficit.
B. there is a trade surplus.
C. trade is in balance.
D. there is no trade.
8-43
113.
A. there is a trade surplus of Q2 - Q1.
B. there is a trade deficit of Q2 - Q1.
C. there is a trade deficit of Q1 - Q2.
D. there is a trade surplus of Q1 - Q2.
8-44
114.
If the world supply curve is SW1, and the country's exchange rate depreciates,
A. the trade surplus will move toward balance.
B. the trade surplus will become greater.
C. the trade deficit will move toward balance.
D. the trade deficit will become greater.
8-45
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Grishkin is nice; her Russian eye
Is underlined for emphasis;
Uncorseted, her friendly bust
Gives promise of pneumatic bliss.
The couched Brazilian jaguar

Compels the scampering marmoset
With subtle effluence of cat;
Grishkin has a maisonette:
The sleek and sinuous jaguar

Does not in his arboreal gloom
Distil so rank a feline smell
As Grishkin in a drawing-room.
And even abstracter entities

Circumambulate her charm;
But our lot crawls between dry ribs
To keep its metaphysics warm.
THE HIPPOPOTAMUS
Similiter et omnes revereantur Diaconos, ut
mandatum Jesu Christi; et Episcopum, ut
Jesum Christum, existentem filium Patris;
Presbyteros autem, ut concilium Dei et
Conjunctionem Apostolorum. Sine his Ecclesia
non vocatur; de quibus suadeo vos sic habeo.
S. Ignatii Ad Trallianos.
And when this epistle is read among you,
cause that it be read also in the church of the
Laodiceans.
he broad
backed
hippopotamus
Rests on his
belly on the
mud;
Although he
seems so firm
to us
He is merely
flesh and
blood.
Flesh-and-
blood is weak
and frail,
Susceptible
to nervous
shock;
While the True Church can never fail
For it is based upon a rock.
The hippo’s feeble steps may err

In compassing material ends,
While the True Church need never stir
To gather in its dividends.
The potamus can never reach

The mango on the mango tree;
But fruits of pomegranate and peach
Refresh the Church from over sea.
At mating time the hippo’s voice

Betrays inflexions hoarse and odd,
But every week we hear rejoice
The Church, at being one with God.
The hippopotamus’s day

Is past in sleep; at night he hunts;
God works in a mysterious way
The Church can sleep and eat at once.
I saw the potamus take wing

Ascending from the damp savannas,
And quiring angels round him sing
The praise of God in loud hosannas.
Blood of the Lamb shall wash him clean

And him shall heavenly arms enfold,
Among the saints he shall be seen
Performing on a harp of gold.
He shall be washed as white as snow,

By all the martyr’d virgins kist,
While the True Church remains below
Wrapt in the old miasmal mist.
A COOKING EGG
En l’an trentiesme de mon aage
Que toutes mes hontes j’ay beues...
ipit sate upright

in her chair
Some distance
from where I
was sitting;
Views of the
Oxford
Colleges
Lay on the
table with the
knitting.
Daguerrotypes
and silhouettes,
Her
grandfather
and great great
aunts,
Supported on the mantelpiece
An Invitation to the Dance.
I shall not want Honour in Heaven

For I shall meet Sir Philip Sidney
And have talk with Coriolanus
And other heroes of that kidney.
I shall not want Capital in Heaven

For I shall meet Sir Alfred Mond:
We two shall lie together, lapt
In a five per cent Exchequer Bond.
I shall not want Society in Heaven

Lucretia Borgia shall be my Bride;
Her anecdotes will be more amusing
Than Pipit’s experience could provide.
I shall not want Pipit in Heaven:

Madame Blavatsky will instruct me
In the seven Sacred Trances;
Piccarda de’ Donati will conduct me....
But where is the penny world I bought

To eat with Pipit behind the screen?
The red-eyed scavengers are creeping
From Kentish Town and Golder’s Green;
Where are the eagles and the trumpets?
Buried beneath some snow-deep Alps.

Over buttered scones and crumpets
Weeping, weeping multitudes
Droop in a hundred A. B. C.’s.
LUNE DE MIEL
ls ont vu les
Pays-Bas, ils
rentrent á Terre
Haute;
Mais une nuit
d’été, les voici
à Ravenne,
A l’aise entre
deux draps,
chez deux
centaines de
punaises;
La sueur
estivale, et une
forte odeur de
chienne.
Ils restent sur
le dos écartant
les genoux
De quatre jambes molles tout gonflées de morsures.
On relève le drap pour mieux égratigner.
Moins d’une lieue d’ici est Sainte Apollinaire
In Classe, basilique connue des amateurs
De chapitaux d’acanthe que tournoie le vent.
Ils vont prendre le train de huit heures

Prolonger leurs misères de Padoue à Milan
Où se trouvent le Cène, et un restaurant pas cher.
Lui pense aux pourboires, et rédige son bilan.
Ils auront vu la Suisse et traversé la France,
Et Sainte Apollinaire, raide et ascétique,
Vieille usine désaffectée de Dieu, tient encore
Dans ses pierres écroulantes la forme précise de Byzance.
DANS LE RESTAURANT
e garçon
délabré qui n’a
rien à faire
Que de se
gratter les
doigts et se
pencher sur
mon épaule:
“Dans mon
pays, il fera
temps pluvieux,
Du vent, du
grand soleil et
de la pluie;
C’est ce qu’on
appelle le jour
de lessive des
gueux.”
(Bavard, baveux, à la croupe arrondie,
Je t’en prie, au moins, ne bave pas dans la soupe.)
“Les saules tout trempés, et des bourgeons sur les ronces—
C’est là, dans une averse, qu’on s’abrite.
J’avais sept ans, elle était plus petite.
Elle était toute mouillée, je lui ai donné des primevères.”
Les tâches de son gilet montent au chiffre de trente-huit.
“Je la chatouillais, pour la faire rire.
Elle avait une odeur fraîche qui m’était inconnue,—”
Mais alors, vieux lubrique—
“Monsieur, le fait est dur,

Il est venu, nous péloter, un gros chien,
Moi j’avais peur, je l’ai quittée à mi-chemin;
C’est dommage.”
Mais alors, tu as ton vautour.

Va-t’en te décrotter les rides du visage;
Tiens, ma fourchette, décrasse-toi le crâne,
De quel droit paies-tu des expériences comme moi?
Tiens, voilà dix sous, pour la salle-de-bain.
Phlébas, le Phénicien, pendant quinze jours noyé,

Oubliait le cri des mouettes et la houle de Cornouaille,
Et les profits et les pertes, et la cargaison d’étain;
Un courant de sous-mer l’emporta très loin,
Le repassant aux étapes de sa vie antérieure.
Figurez-vous donc, c’était un sort pénible.
Cependant, ce fut jadis un bel homme, de haute taille.
LE SPECTATEUR
alheur à
malheureuse
Tamise!
Qui coule si
pres du
Spectateur.
Le directeur
Du
Spectateur
Empeste la
brise.
Les
actionnaires
Réactionnair
es
Du
Spectateur
Conservateur
Bras-dessus bras-dessous
Font des tours
A pas de loup.
Dans un égout
Une petite fille
En guenilles
Camarde
Regarde
Le directeur
Du Spectateur
Conservateur
Et crève d’amour.
MÉLANGE ADULTÈRE DE TOUT
n Amérique,
professeur;
En Angleterre,
journaliste;
C’est à grands
pas et en sueur
Que vous
suivrez à peine
ma piste.
En Yorkshire,
conférencier;
A Londres,
un peu
banquier;
(Vous me
paierez bien la
tête.)
C’est à Paris
que je me coiffe
Casque noir de jemenfoutiste.
En Allemagne, philosophe
Surexcité par Emporheben
Au grand air de Bergsteigleben;
J’erre toujours de-ci de-là
A divers coups de tra la la
De Damas jusque à Omaha;
Je célebrai mon jour de fête
Dans un oasis d’Afrique,
Vêtu d’une peau de girafe.
On montrera mon cénotaphe

Aux côtes brulantes de Mozambique.
ODE
To you particularly, and to all the Volscians
Great hurt and mischief.
ired.
Subterrene
laughter
synchronous
With silence
from the sacred
wood
And bubbling of
the uninspired
Mephitic river.
Misunderstood
The accents of the now retired
Profession of the calamus.
Tortured.
When the bridegroom smoothed his hair
There was blood upon the bed.
Morning was already late.
Children singing in the orchard
(Io Hymen, Hymenæe)
Succuba eviscerate.
Tortuous.
By arrangement with Perseus
The fooled resentment of the dragon
Sailing before the wind at dawn.
Golden apocalypse. Indignant
At the cheap extinction of his taking-off.
Now lies he there
Tip to tip washed beneath Charles’ Wagon.
PRUFROCK.
THE LOVE SONG OF
J. ALFRED PRUFROCK
S’io credesse che mia risposta fosse
A persona che mai tornasse al mondo,
Questa fiamma staria senza più scosse.
Ma perciocche giammai di questo fondo
Non torno vivo alcun, s’i’ odo il vero,
Senza tema d’infamia ti rispondo.
us go then,
you and I,
When the
evening is
spread out
against the sky
Like a patient
etherized upon
a table;
Let us go,
through certain
half-deserted
streets,
The muttering
retreats
Of restless
nights in one-
night cheap hotels
And sawdust restaurants with oyster-shells:
Streets that follow like a tedious argument
Of insidious intent
To lead you to an overwhelming question....
Oh, do not ask, “What is it?”
Let us go and make our visit.
In the room the women come and go

Talking of Michelangelo.
The yellow fog that rubs its back upon the window-panes,
The yellow smoke that rubs its muzzle on the window-panes,
Licked its tongue into the corners of the evening,
Lingered upon the pools that stand in drains,
Let fall upon its back the soot that falls from chimneys,
Slipped by the terrace, made a sudden leap,
And seeing that it was a soft October night,
Curled once about the house, and fell asleep.
And indeed there will be time

For the yellow smoke that slides along the street,
Rubbing its back upon the window-panes;
There will be time, there will be time
To prepare a face to meet the faces that you meet;
There will be time to murder and create,
And time for all the works and days of hands
That lift and drop a question on your plate;
Time for you and time for me,
And time yet for a hundred indecisions,
And for a hundred visions and revisions,
Before the taking of a toast and tea.
In the room the women come and go

Talking of Michelangelo.
And indeed there will be time

To wonder, “Do I dare?” and, “Do I dare?”
Time to turn back and descend the stair,
With a bald spot in the middle of my hair—
(They will say: “How his hair is growing thin!”)
My morning coat, my collar mounting firmly to the chin,
My necktie rich and modest, but asserted by a simple pin—
(They will say: “But how his arms and legs are thin!”)
Do I dare
Disturb the universe?
In a minute there is time
For decisions and revisions which a minute will reverse.
For I have known them all already, known them all:

Have known the evenings, mornings, afternoons,
I have measured out my life with coffee spoons;
I know the voices dying with a dying fall
Beneath the music from a farther room.
So how should I presume?
And I have known the eyes already, known them all—

The eyes that fix you in a formulated phrase,
And when I am formulated, sprawling on a pin,
When I am pinned and wriggling on the wall,
Then how should I begin
To spit out all the butt-ends of my ways and days?
And how should I presume?
And I have known the arms already, known them all—

Arms that are braceleted and white and bare
(But in the lamplight, downed with light brown hair!)
Is it perfume from a dress
That makes me so digress?
Arms that lie along a table, or wrap about a shawl.
And should I then presume?
And how should I begin?
Shall I say, I have gone at dusk through narrow streets

And watched the smoke that rises from the pipes
Of lonely men in shirtsleeves, leaning out of windows?...
I should have been a pair of ragged claws

Scuttling across the floors of silent seas.
And the afternoon, the evening, sleeps so peacefully!

Smoothed by long fingers,
Asleep ... tired ... or it malingers,
Stretched on the floor, here beside you and me.
Should I, after tea and cakes and ices,
Have the strength to force the moment to its crisis?
But though I have wept and fasted, wept and prayed,
Though I have seen my head (grown slightly bald) brought
in upon a platter,
I am no prophet—and here’s no great matter;
I have seen the moment of my greatness flicker,
And I have seen the eternal Footman hold my coat, and
snicker,
And in short, I was afraid.
And would it have been worth it, after all,

After the cups, the marmalade, the tea,
Among the porcelain, among some talk of you and me,
Would it have been worth while,
To have bitten off the matter with a smile,
To have squeezed the universe into a ball
To roll it toward some overwhelming question,
To say: “I am Lazarus, come from the dead,
Come back to tell you all, I shall tell you all”—
If one, settling a pillow by her head,
Should say: “That is not what I meant at all,
That is not it, at all.”
And would it have been worth it, after all,

Would it have been worth while,
After the sunsets and the dooryards and the sprinkled streets,
After the novels, after the teacups, after the skirts that trail
along the floor—
And this, and so much more?—
It is impossible to say just what I mean!
But as if a magic lantern threw the nerves in patterns on a
screen:
Would it have been worth while
If one, settling a pillow or throwing off a shawl,
And turning toward the window, should say:
“That is not it at all,
That is not what I meant, at all.”
No! I am not Prince Hamlet, nor was meant to be;

Am an attendant, lord, one that will do
To swell a progress, start a scene or two,
Advise the prince; no doubt, an easy tool,
Deferential, glad to be of use,
Politic, cautious, and meticulous;
Full of high sentence, but a bit obtuse;
At times, indeed, almost ridiculous—
Almost, at times, the Fool.
I grow old ... I grow old ...

I shall wear the bottom of my trousers rolled.
Shall I part my hair behind? Do I dare to eat a peach?

I shall wear white flannel trousers, and walk upon the beach.
I have heard the mermaids singing, each to each.
I do not think that they will sing to me.
I have seen them riding seaward on the waves

Combing the white hair of the waves blown back
When the wind blows the water white and black.
We have lingered in the chambers of the sea

By sea-girls wreathed with seaweed red and brown
Till human voices wake us, and we drown.
PORTRAIT OF A LADY
Thou hast committed—
Fornication: but that was in another country,
And besides, the wench is dead.
The Jew of Malta
mong the
smoke and fog
of a December
afternoon
You have the
scene arrange
itself—as it will
seem to do—
With “I have
saved this
afternoon for
you”;
And four wax
candles in the
darkened room,
Four rings of
light upon the
ceiling
overhead,
An atmosphere of Juliet’s tomb
Prepared for all the things to be said, or left unsaid.
We have been, let us say, to hear the latest Pole
Transmit the Preludes, through his hair and finger-tips.
“So intimate, this Chopin, that I think his soul
Should be resurrected only among friends

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Macroeconomics 9th Edition Colander

Comparative Advantage, Exchange Rates, and Globalization

True / False Questions

7. Manufacturing wages have risen significantly for 20 years.

A. Foreigners have a comparative advantage in shrimping.

B. Americans have a comparative advantage in shrimping.

C. Foreign sellers probably are colluding on price to maximize profits.

A. deficits and was an international lender.

B. deficits and was an international borrower.

C. surpluses and was an international lender.

D. surpluses and was an international borrower.

13. The balance of trade measures the:

A. difference between the value of imports and that of exports.

B. share of U.S. imports coming from various regions of the world.

C. share of U.S. exports going to various regions of the world.

D. exchange rate needed to make imports equal exports.

A. shown a surplus since the 1980s.

B. been in deficit since the 1980s.

15. When a country runs a trade deficit, it does so by:

A. borrowing from foreign countries or selling assets to them.

B. borrowing from foreign countries or buying assets from them.

C. lending to foreign countries or selling assets to them.

D. lending to foreign countries or buying assets from them.

16. When a country runs a trade surplus, it will:

A. borrow from foreign countries or sell assets to them.

B. borrow from foreign countries or buy assets from them.

C. lend to foreign countries or sell assets to them.

D. lend to foreign countries or buy assets from them.

A. France has a comparative advantage in both goods.

D. Germany has a comparative advantage in both goods.

A. France exports both goods to Germany.

B. Germany exports both goods to France.

A. keep production diversified.

B. specialize according to their comparative advantage.

D. use trade restrictions to reduce competition for domestic producers.

A. that it wants to consume.

B. for which it has a relatively high opportunity cost.

C. for which it has a relatively low opportunity cost.

D. that it can produce at zero cost.

21. Globalization represents:

B. the opposite of isolationism.

C. the economic complement of political isolationism.

D. the political complement of economic isolationism.

A. Canada will export both televisions and wheat.

B. Canada will export wheat and import televisions.

C. the United States will export wheat and import televisions.

D. the United States will export both televisions and wheat.

A. Canada will import both televisions and wheat.

B. Canada will import wheat and export televisions.

C. the United States will import wheat and export televisions.

D. the United States will import both televisions and wheat.

24. A nation's comparative advantage in the production of an item is determined by:

A. which country has already specialized in the production of the item.

B. the total and marginal costs of producing the item.

D. wage rates and other input costs.

B. exporting nations gain from trade and importing nations lose.

C. importing nations gain from trade and exporting nations lose.

D. all trading partners can gain from trade.

A. It cannot; comparative advantage predicts that a country either exports a product or

B. The pattern is not due to comparative advantage but to government restrictions on

C. Mexico has a comparative disadvantage in automobiles.

Refer to the table shown. Which of the following statements is true?