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ECON 335 MIDTERM AND FINAL EXAM COMPLETE SET
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ECON 335 MIDTERM AND FINAL EXAM COMPLETE SET
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ECON 335 MIDTERM AND FINAL EXAM COMPLETE SET1. Would large economies such as the United States that have large populations tend
to have lower or higher openness indicators? - ANSWER: Lower
2. The index of openness for a nation that had $400 million in exports, $400 million
in imports, and GDP of $1,600 million would be? - ANSWER: 0.5
3. A relative measure of the importance of trade is? - ANSWER: trade as a
percentage of GDP.
4. The openness indicator is measured as? - ANSWER: exports plus imports divided
by GDP.
5. An important factor that increased international capital flows in the second half of
the nineteenth century was - ANSWER: technological innovations.
6. Labor mobility was - ANSWER: greater in 1900 than in 1999.
7. One important difference between the international economy of today and the
economy of 100 years ago is - ANSWER: the presence of international bodies such as
the IMF and World Bank.
Economists overwhelmingly support more open markets because trade - ANSWER:
leads to a better allocation of resources inside countries.
9. One of the most important ways in which local instabilities are quickly spread to
the international economy is through mobility of - ANSWER: Capital
10. Smaller countries tend to have lower openness measures than large countries
(T/F) - ANSWER: F
11. The trade-to-GDP ratio for a nation that had $600 million in exports, $400 million
in imports, and GDP of $2,000 million would be
A) 0.1.
B) 0.2.
C) 0.5.
D) -0.1. - ANSWER: C) 0.5
12. The trade-to-GDP ratio is calculated by
A) exports divided by GDP.
B) imports divided by GDP.
C) exports plus imports divided by GDP.
D) exports minus imports divided by GDP. - ANSWER: C
13. An important factor that increased international capital flows in the latter part of
the 1800s was
, A) the creation of the International Monetary Fund.
B) the creation of numerous regional trade agreements.
C) the rapid rate of East Asian economic growth.
D) technological innovations. - ANSWER: D
14. Countries that have high rates of savings also have
A) high rates of investment.
B) low rates of investment.
C) stock market bubbles.
D) low rates of growth. - ANSWER: A
15. One of the reasons we know that international labor mobility has been higher at
other times is because
A) the percent of our population that was foreign born was higher.
B) wages were lower.
C) labor was important in agriculture.
D) the population was younger. - ANSWER: A
16. Which of the following is FALSE?
A) Capital flows today are larger mainly because economies are larger.
B) The last two decades are the first time in history that a nation has borrowed more
than 10 percent of its GDP.
C) There are important qualitative differences between capital flows today and in the
past.
D) Today most international financial transactions involve buying and selling assets
denominated in foreign currencies. - ANSWER: B
17. An example of a foreign direct investment (FDI) would include
A) a U.S. couple buying land for their dream retirement home in Costa Rica.
B) a U.S. mutual fund manager buying shares of stock in a Brazilian oil company.
C) a U.S. firm expanding its U.S. operations.
D) a wealthy Mexican buying U.S. Treasury bills. - ANSWER: A
18. Economists
A) describe reducing tariffs and quotas as shallow integration.
B) describe reducing tariffs and quotas as deep integration.
C) believe that changing domestic policies affecting trade is a relatively simple
process.
D) believe that the work of reducing trade barriers is done since most tariffs are low
and most quotas eliminated. - ANSWER: A) as shallow integration
19. Increasing free trade may - ANSWER: A) increase competition and innovation.
B) bring a variety of choices for consumers.
C) promote efficient allocation of resources
20. Since the end of World War II, world trade has grown much faster than world
output.
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