Ekekek Exam Essay

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Name: ___________________________________ Date: ______________ 1. Which of the following entries are considered to be exports of services? A) Japanese buying soybeans from the United States B) Chinese selling iPods to the United States C) Mexican tourists visiting the Grand Canyon D) French wine sold to the United States 2. A bilateral trade balance means: A) half the trade deficit. B) the measure of imports only—not exports. C) the difference between the value of imports and exports between two trading nations. D) the sum of the value of imports and exports traded between two nations. 3. If a country's GDP is $10 trillion and its overall trade flows are $2 trillion (exports and imports), then: A) its trade-to-GDP ratio is 20%. B) it is not a successful country. C) its GDP needs to increase. D) its trade-to-GDP ratio is too high. 4. Foreign direct investment (FDI) flows include: A) purchase of a controlling interest in a foreign firm by a domestic firm. B) purchase of stocks or bonds directly from an international dealer. C) purchase of foreign government bonds by domestic investors. D) accounts denominated in foreign currency in foreign banks owned by domestic depositors. 5. Which of the following is not considered to be a factor of production? A) labor B) capital C) natural resources D) government Page 1 6. The focus of the Ricardian model is on: A) how countries' resource bases explain international trade. B) how countries' different technologies explain international trade. C) how transportation costs explain international trade. D) how different languages and cultures explain international trade. 7. The focus of the Ricardian model is on how differences in _________ influence international trade patterns. A) demand B) comparative costs C) absolute costs D) transportation costs 8. What is the marginal product of labor (MPL)? A) the
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