Which of the following entries are considered to be exports of services? Chinese students studying in the U.S. Mexican tourists visiting the Grand Canyon American companies outsourcing to India U.S. citizens buying Japanese cars

Mexican tourists visiting the Grand Canyon

"Value added" in the context of international trade refers to: The difference between the value of the imported inputs and the value of the exported product The profit margin on exports The tariff imposed on imports The total cost of production

The difference between the value of the imported inputs and the value of the exported product

The bilateral trade balance may overstate the trade gap if: Some of the manufacturing inputs are imported Exports exceed imports There is a trade surplus All goods are domestically produced

Some of the manufacturing inputs are imported

NAFTA is: A political alliance in North America A currency union in North America A free trade agreement between Mexico, Canada, and the US A trade barrier among North American countries

A free trade agreement between Mexico, Canada, and the US

What is the best measure of a country's openness to international trade? The number of trade agreements it has signed The size of its trade surplus The ratio of its exports plus imports to its GDP The volume of its foreign direct investment

The ratio of its exports plus imports to its GDP

Which of the following best explains the difference between commodity money and fiat money? Fiat money is universally accepted, whereas commodity money is not. Fiat money is backed by physical commodities, whereas commodity money is not. Fiat money has no value except as money, whereas commodity money has value independent of its use as money. Commodity money is used only in barter systems, whereas fiat money is used in modern economies.

Fiat money has no value except as money, whereas commodity money has value independent of its use as money.

Which of the following is not a reason why businesses accept paper currency knowing that, unlike a gold coin, the paper the currency is printed on is worth very little? Paper currency is a good medium of exchange because it is widely accepted. Paper currency has intrinsic value like gold coins. Paper currency is backed by the government's promise to pay. Paper currency is durable and easy to transport.

Paper currency has intrinsic value like gold coins.

The economic definition of money is any asset that people are generally willing to accept in exchange for goods and services. Which of the following best describes this definition? Any asset that people are generally willing to accept in exchange for goods and services. Any digital currency that is accepted by online merchants. Any physical object that can be used to barter for goods and services. Any government-issued currency that is used for transactions.

Any asset that people are generally willing to accept in exchange for goods and services.

Bank reserves include which of the following? Vault cash and deposits with the Federal Reserve. Loans to customers. Only deposits with the Federal Reserve. Only vault cash.

Vault cash and deposits with the Federal Reserve.

Calculate the percentage change in GDP using the formula: (year 2 - year 1) / year 1 x 100. The % Change in GDP is _____ \[ \frac{\text{year 2} - \text{year 1}}{\text{year 1}} \times 100 \] \[ \frac{\text{year 2} + \text{year 1}}{\text{year 1}} \times 100 \] \[ \frac{\text{year 1} + \text{year 2}}{\text{year 2}} \times 100 \] \[ \frac{\text{year 1} - \text{year 2}}{\text{year 2}} \times 100 \]

\[ \frac{\text{year 2} - \text{year 1}}{\text{year 1}} \times 100 \]

Determine the unemployment rate using the formula: # of unemployed / labor force x 100. The Unemployment Rate is _____ \[ \frac{\text{labor force}}{\text{# of unemployed}} \times 100 \] \[ \frac{\text{# of unemployed}}{\text{labor force}} \times 100 \] \[ \frac{\text{# of unemployed}}{\text{working age population}} \times 100 \] \[ \frac{\text{working age population}}{\text{labor force}} \times 100 \]

\[ \frac{\text{# of unemployed}}{\text{labor force}} \times 100 \]

Calculate the labor force participation rate using the formula: labor force / working age population x 100. The Labor Force Participation Rate is _____ \[ \frac{\text{total population}}{\text{working age population}} \times 100 \] \[ \frac{\text{working age population}}{\text{labor force}} \times 100 \] \[ \frac{\text{labor force}}{\text{total population}} \times 100 \] \[ \frac{\text{labor force}}{\text{working age population}} \times 100 \]

\[ \frac{\text{labor force}}{\text{working age population}} \times 100 \]

Calculate the real interest rate using the formula: nominal interest rate - expected inflation. The Real Interest Rate is _____ expected inflation - nominal interest rate nominal interest rate - expected inflation nominal interest rate + expected inflation nominal interest rate / expected inflation

nominal interest rate - expected inflation

Determine the nominal interest rate using the formula: Real Interest Rate + Expected Inflation. The Nominal Interest Rate is _____ Real Interest Rate - Expected Inflation Expected Inflation - Real Interest Rate Real Interest Rate / Expected Inflation Real Interest Rate + Expected Inflation

Real Interest Rate + Expected Inflation

Calculate the Consumer Price Index (CPI) using the formula: (Price of basket of goods and services in current year / price of basket in base year) x 100. The CPI is _____ \[ \frac{\text{Price of basket in base year}}{\text{Price of basket in current year}} \times 100 \] \[ \frac{\text{Price of basket in current year}}{\text{Price of basket in base year}} \times 100 \] \[ \frac{\text{Price of basket in current year}}{\text{Price of basket in base year}} \times 10 \] \[ \frac{\text{Price of basket in base year}}{\text{Price of basket in current year}} \times 10 \]

\[ \frac{\text{Price of basket in current year}}{\text{Price of basket in base year}} \times 100 \]

Determine the inflation rate using the formula: (CPI this year - CPI last year) / CPI last year x 100. The Inflation Rate is _____ \[ \frac{\text{CPI this year} + \text{CPI last year}}{\text{CPI last year}} \times 100 \] \[ \frac{\text{CPI this year} - \text{CPI last year}}{\text{CPI last year}} \times 100 \] \[ \frac{\text{CPI last year} - \text{CPI this year}}{\text{CPI this year}} \times 100 \] \[ \frac{\text{CPI last year} + \text{CPI this year}}{\text{CPI this year}} \times 100 \]

\[ \frac{\text{CPI this year} - \text{CPI last year}}{\text{CPI last year}} \times 100 \]

A country has a comparative advantage in producing a good or service if: it can produce the good or service faster than other countries. it has more resources than other countries. the opportunity cost of producing the good or service is lower for that country than for other countries. it can produce the good or service at a lower absolute cost.

the opportunity cost of producing the good or service is lower for that country than for other countries.

The Ricardian model of international trade analyzes trade under the assumption that: all countries have the same technology. production possibilities frontiers are straight lines. there are increasing returns to scale. there are no transportation costs.

production possibilities frontiers are straight lines.

Autarky refers to: a situation in which a country does not trade with other countries. a situation where a country only exports goods. a situation where a country trades with all countries. a situation where a country only imports goods.

a situation in which a country does not trade with other countries.

What are the sources of comparative advantage? Differences in climate, Differences in factor endowments, Differences in technology Similarities in resources, Equal access to markets, Identical production methods Differences in population, Differences in government policies, Differences in culture Similarities in climate, Equal factor endowments, Identical technology

Differences in climate, Differences in factor endowments, Differences in technology

Factor abundance refers to: the absolute quantity of a factor of production. the cost of a factor of production. the supply of a factor of production relative to other factors. the quality of a factor of production.

the supply of a factor of production relative to other factors.

Factor intensity is a measure of: the quality of a factor relative to other factors. the quantity of a factor used in comparison with other factors. the availability of a factor relative to other factors. the cost of a factor relative to other factors.

the quantity of a factor used in comparison with other factors.

According to the Heckscher-Olin Model, a country with an abundant supply of a factor of production will: only export raw materials. have a comparative advantage in goods that require scarce factors. not have any comparative advantage. have a comparative advantage in goods whose production is intensive in that factor.

have a comparative advantage in goods whose production is intensive in that factor.

Increasing returns to scale occur when: productivity decreases with the quantity of output. costs remain constant with the quantity of output. productivity rises with the quantity of output. costs increase with the quantity of output.

productivity rises with the quantity of output.

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