Chapter 17 Reading Quiz / Name
Date
Period
1. Who is made better off when countries trade?
O a. both exporting and importing countries
O b. only the exporting country
O c. only the importing country
O d. neither the exporting nor importing country
2. Exports are
O a. domestic stocks and bonds sold abroad.
O b. foreign stocks and bonds sold domestically.
O c. domestically produced goods and services sold abroad.
O d. foreign-produced goods and services sold domestically.
3. Imports are
O a. domestic stocks and bonds sold abroad.
O b. foreign stocks and bonds sold domestically.
O c. domestically produced goods and services sold abroad.
O d. foreign-produced goods and services sold domestically.
4. The value of exports minus the value of imports is called
O a. the balance of payments.
O b. capital income.
O c. net exports.
O d. None of the above are correct.
5. If exports are less than imports, the trade balance
O a. is in deficit.
O b. is balanced.
O c. is in surplus.
O d. cannot be determined from this information alone. / 6. In an open economy,
O a. Saving = Foreign Saving + Net Foreign Investment.
O b. Saving = Domestic Investment + Net Foreign Investment.
O c. Saving = Domestic Saving + Net Foreign Investment.
O d. None of the above are correct.
7. The best measure of the purchasing power of one currency relative to another in foreign trade is
O a. the nominal exchange rate.
O b. the real interest rate.
O c. the real exchange rate.
O d. the nominal interest rate.
8. A depreciation of the U.S. real exchange rate induces U.S. consumers to buy
O a. fewer domestic goods and fewer foreign goods.
O b. more domestic goods and fewer foreign goods.
O c. fewer domestic goods and more foreign goods.
O d. more domestic goods and more foreign goods.
9. An appreciation of the U.S. real exchange rate induces U.S. consumers to buy
O a. fewer domestic goods and fewer foreign goods.
O b. more domestic goods and fewer foreign goods.
O c. fewer domestic goods and more foreign goods.
O d. more domestic goods and more foreign goods.
10. Purchasing-power parity describes the forces that determine
O a. exchange rates in the short run.
O b. prices in the short run.
O c. prices in the long run
O d. exchange rates in the long run.
Chapter 17 Reading Quiz Key /
1. Who is made better off when countries trade?
O a. both exporting and importing countries
b. only the exporting country
c. only the importing country
d. neither the exporting nor importing country
2. Exports are
a. domestic stocks and bonds sold abroad.
b. foreign stocks and bonds sold domestically.
O c. domestically produced goods and services sold abroad.
d. foreign-produced goods and services sold domestically.
3. Imports are
a. domestic stocks and bonds sold abroad.
b. foreign stocks and bonds sold domestically.
c. domestically produced goods and services sold abroad.
O d. foreign-produced goods and services sold domestically.
4. The value of exports minus the value of imports is called
a. the balance of payments.
b. capital income.
O c. net exports.
d. None of the above are correct.
5. If exports are less than imports, the trade balance
O a. is in deficit.
b. is balanced.
c. is in surplus.
d. cannot be determined from this information alone. / 6. In an open economy,
a. Saving = Foreign Saving + Net Foreign Investment.
O b. Saving = Domestic Investment + Net Foreign Investment.
c. Saving = Domestic Saving + Net Foreign Investment.
d. None of the above are correct.
7. The best measure of the purchasing power of one currency relative to another in foreign trade is
a. the nominal exchange rate.
b. the real interest rate.
O c. the real exchange rate.
d. the nominal interest rate.
8. A depreciation of the U.S. real exchange rate induces U.S. consumers to buy
a. fewer domestic goods and fewer foreign goods.
O b. more domestic goods and fewer foreign goods.
c. fewer domestic goods and more foreign goods.
d. more domestic goods and more foreign goods.
9. An appreciation of the U.S. real exchange rate induces U.S. consumers to buy
a. fewer domestic goods and fewer foreign goods.
b. more domestic goods and fewer foreign goods.
O c. fewer domestic goods and more foreign goods.
d. more domestic goods and more foreign goods.
10. Purchasing-power parity describes the forces that determine
a. exchange rates in the short run.
b. prices in the short run.
c. prices in the long run
O d. exchange rates in the long run.