1.   The economic relationship and integration among nations is defined as:

A)    microeconomics

B)     economic interdependence

C)     macroeconomics

D)    open economies Answer: B

2.   The total value of all goods and services produced within a nation’s borders is called:

A)    GDP

B)     net exports

C)     current account balance

D)    GNP Answer: A

3.   When interest rates increase in the United States, capital flows from abroad will:

A)    increase

B)     decrease

C)     no change

D)    not be available anymore Answer: A

4.   Which of the following is most restricted to flow across national boundaries?

A)    People

B)     Capital Flows

C)     Financial and Portfolio Investment

D)    Foreign Direct Investment Answer: A

5.   Which of the following analyzes the basis for and gains from trade?

A)    Balance of payments

B)     Foreign exchange market

C)     International trade policy

D)    International trade theory Answer: D

6.   Which of the following examines the reasons for and effects of trade restrictions?

A)    Balance of payments

B)     Foreign exchange market

C)     International trade policy

D)    International trade theory Answer: C

7.   A summary statement of all the international transactions of the residents of a nation with the rest of the world during a particular period of time is called:

A)    Balance of payments

B)    Net exports

C)     GNP

D)    GDP Answer: A

8.  _____________ has grown at a faster rate than ______________, indicating an increase in economic interdependence among nations.

A)    World trade, world production

B)     US GDP, world GDP

C)     World production, world trade

D)    Output in the US, incomes in the US Answer: A

9.   An inflow of capital funds to the United States tends to increase the international value of the dollar, stimulating ____________ and discouraging ________________.

A)    US exports, US imports

B)     US imports, economic activity abroad

C)     US economic activity, economic activity abroad

D)    US imports, US exports Answer: D

10. International trade theory and policies as they relate to individual nations are the _____________________ aspects of international economics.

A)    International finance

B)     microeconomic

C)     national income accounting

D)    macroeconomic Answer: B

11. The study of the whole economy, such as the total receipts and payments of a nation and the general price index, is considered to be a:

A)    microeconomic application

B)     macroeconomic application

C)     both micro and macroeconomic application

D)    foreign exchange application Answer: B

12. A nation that has an open economy:

A)    allows private ownership of capital

B)     has flexible exchange rates

C)     has fixed exchange rates

D)    trades with other nations Answer: D

13. The field of international economics:

A)    is a relatively new branch of economic study

B)      includes contributions from distinguished economists like Adam Smith, David Ricardo and Alfred Marshall

C)      includes macroeconomics, but not microeconomics, issues.

D)     includes microeconomics, but not macroeconomics, issues. Answer: B

14. The increasing integration of economies around the world, particularly through trade and

financial flows, is:

A)    outsourcing

B)     macroeconomics

C)     globalization

D)    autarky

Answer: C

15. The loose organization that blames globalization for many human and environmental problems throughout the world is:

A)    The World Trade Organization

B)     The World Bank

C)     the protectionist movement

D)    the anti-globalization movement Answer: D

16. Which of the following Geneva based international organization sets the rules of trade between nations, implements new trade agreements and settles trade disputes between member countries

A)    World Trade Organization (WTO)

B)     World Bank (IBDR)

C)     International Monetary Fund (IMF)

D)     United Nations (UN) Answer: A