ECO 372 Week 5 Knowledge Check

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ECO/372 Entire Course Link

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ECO 372 Week 5 Knowledge Check

Instructions

Week 5 Knowledge Check
The material presented below is not meant to be a comprehensive list of all you need to know in the content area. Rather it is a starting point for building your knowledge and skills. Additional study materials are recommended in each area below to help you master the material.
Personalized Study Guide Results:
Score: 6 / 6
Concepts Mastery Questions
TRADE DEFICITS 100% • 1
INTERNATIONAL TRADE; 100% • 2
TRADE TARIFFS 100% • 3
TARIFFS 100% • 4
EXCHANGE RATES 100% • 5
TRADE RESTRICTION 100% • 6
Concept: TRADE DEFICITS
Mastery : 100% Questions : • 1
Materials on the concept:
• The Balance of Payments
1.
In the U.S. current account, most of the trade deficit results from an excess of imported
• A.
merchandise and services
• B.
merchandise
• C.
services
• D.
transfer
Concept: INTERNATIONAL TRADE;
Mastery : 100% Questions : • 4
Materials on the concept:
• The Balance of Payments
2.
What is the difference between the balance of trade and the balance of payments?
• A.
The balance of trade is only part of the balance of trade.
• B.
The balance of payments is only part of the balance of trade.
• C.
The two are different parts of the balance of merchandise accounts.
• D.
The two are different parts of the balance of financial and capital accounts.
Concept: TRADE TARIFFS
Mastery : 100% Questions : • 3
Materials on the concept:
• Varieties of Trade Restrictions
• Tariffs and Quotas
• Tariffs and Quotas
3.
If a government has implemented significantly higher trade tariffs, but does not want this action to affect the value of its currency, it will
• A.
sell foreign currency because the tariffs will tend to make the domestic currency depreciate
• B.
buy foreign currency because the tariffs will tend to make the domestic currency appreciate
• C.
sell foreign currency because the tariffs will tend to make the domestic currency appreciate
• D.
buy.
Concept: TARIFFS
Mastery : 100% Questions : • 4
Materials on the concept:
• Varieties of Trade Restrictions
• Varieties of Trade Restrictions
• Tariffs and Quotas
• The Trade Balance Goal
• Tariffs and Quotas
4.
During 2007, the United States and Japan announced possible limits on Chinese imports through higher tariff rates on Chinese products. To avoid these limits, China would have to
• A.
decrease the value of the yuan and increase its trade surplus
• B.
decrease the value of the yuan and decrease its trade surplus
• C.
increase the value of the yuan and increase its trade surplus
• D.
increase the value of the yuan and decrease its trade surplus
Concept: EXCHANGE RATES
Mastery : 100% Questions : • 5
Materials on the concept:
• Fixed Exchange Rates and Exchange Rate Stability
• Fixed Exchange Rates
• The Exchange Rate Goal
• Real Exchange Rates
• Influencing Exchange Rates with Monetary and Fiscal Policy
5.
If a country wants to prevent its exchange rate from falling, it could
• A.
remove restrictions on imports
• B.
place restrictions on imports
• C.
pursue easier monetary policy
• D.
remove any subsidies on exports
Concept: TRADE RESTRICTION
Mastery : 100% Questions : • 6
Materials on the concept:
• Reasons for Trade Restrictions
• Fiscal Policy’s Effect on the Trade Balance
• International versus Domestic Goals
• The Trade Balance Goal
• Monetary Policy’s Effect on the Trade Balance
6.
All other things being equal, an increase in trade restrictions on imports will
• A.
reduce the demand for foreign currency, causing it to appreciate
• B.
reduce the demand for foreign currency, causing it to depreciate
• C.
increase the demand for foreign currency, causing it to appreciate
• D.
increase the demand for foreign currency, causing it to depreciate

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