Question

25. Which of the following statements is correct?

Multiple Choice

• Export sales are not important to U.S. industries because U.S. GDP is so large.

• The United States is increasingly dependent on exports, but not on imports.

• The United States would not be affected if it quit importing goods.

• Many U.S. industries are very dependent on export sales.

30. Terms of trade refers to

Multiple Choice

• credit arrangements for financing exports and imports.

• the rate at which goods are exchanged in international trade.

• the degree to which one country has a comparative advantage.

• the balance of payments.

31. An increase in nominal GDP means that there has been an outward shift of the production possibilities curve. T/F

32. Specialization and trade

Multiple Choice

• increase the standard of living.

• make workers lazy.

• increase the prices of goods.

• reduce consumption possibilities.

35. When the dollar appreciates, its value compared to other countries’ currencies

Multiple Choice

• more information is needed to predict the change in relative value.

• increases.

• stays the same.

• decreases.

Answer 1

25. Option D

Expanding the production of America's most competitive industries and products, through exports, raises U.S. incomes. Shifting production to the most competitive areas of our economy helps raise the productivity of the average American worker and through that the income they earn. With the ability to serve a global market, investment is encouraged in expanding export sectors and the rising scale of output helps lower average production costs. Such effects help strengthen America’s economic growth rate

30.Option B

Terms of trade measures the volume of imports attainable by a unit of exports i.e. the volume of foreign goods that can be bought by a country by exporting a given amount of domestic product. The terms of trade reflect the rate at which one country's goods exchange for those of another country.

31.False

Economic growth is the increase in the market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.When the economy grows and all other things remain constant, we can produce more, so this will cause a shift in the production possibilities curve outward, or to the right.

32. Option A

Occasionally, people who specialize in a field develop new techniques or new technologies that lead to huge increases in productivity. Increased specialization ultimately leads to higher standards of living for all those involved in economic exchanges.