Chapter 1 An Introduction to International TradeMultiple-Choice Questions1) C ountries of the world differ in terms of theirA) g eographic size.B) p opulation size.C) s tandards of living.D) A ll of the above.2) T he difference between a country's Gross National Product (GNP) and its Gross Domesticproduct (GDP) is thatA) G NP refers to production within the nation while GDP refers to production by domesticfactors no matter where they are located.B) G NP is always bigger than GDP.C) G DP refers to production within the nation while GNP refers to production by domesticfactors no matter where they are located.D) T wo of the above are true.3) P er capita GNP is defined as a country's GNP divided by itsA) p opulation.B) l abor force.C) c apitalists.D) N one of the above.4) W hich of the following statements is false?A) R icher countries tend to be found in North America, Western Europe, and Japan.B) C ountries with large populations tend to be rich.C) G rowth of per capita GNP tends to be quite stable about 1.5-3 percent per year inindustrialized countries.D) O ver the past several decades, growth of per capita GNP tends to be higher on averagein industrialized countries than in low or middle-income countries.5) T he ratio of a country's exports to its total output (GNP or GDP)A) i s known as the index of openness.B) p rovides a rough measure of the importance of international trade to that economy.C) i f calculated for the United States would be quite low.D) A ll of the above.6) W hich of the following statements is false?A) B etween 1980 and 2000, the index of openness has risen for most countries.B) S ince 1950, international trade has been growing faster than the growth of world output.C) A country cannot be a leading world exporter without a high index of openness.D) T wo of the above are true.7) B arriers to tradeA) i nclude government policies such as tariffs and quotas.B) h ave been falling with technological improvements in transportation andcommunication.C) h ave risen since World War II as many countries have imposed higher tariffs.D) T wo of the above are true.8) W hich of the following is true?A) M uch of the trade of the European Union (EU) countries is with EU countries.B) I ndustrialized countries tend to trade relatively little and largely with developingcountries.C) D eveloping countries in Africa and South America tend to trade the most and largelywith themselves.D) A ll of the above are true.9) T he leading trading partner of the United States isA) C anada.B) J apan.C) G ermany.D) M exico.10) W hich of the following statements is true?A) C ountries tend to trade extensively with their neighbors.B) T he United States is an important trading partner for many countries.C) T he largest amount of international trade occurs between industrialized countries.D) A ll of the above are true.11) T he most commonly traded product (by value) in recent years has beenA) a utomobiles.B) w heat.C) t elevisions, stereos, and VCRs.D) s teel.12) T he United States tends to exportA) o nly a narrow range of products such as wheat.B) a wide set of products, primarily manufactured goods.C) v ery little.D) N one of the above.13) J apanese exports are heavily concentrated inA) a gricultural products such as rice.B) n atural resource products such as coal.C) m anufactured products including motor vehicles.D) B oth A and C.14) T he types of goods Japan exports and imports appear to be well explained byA) J apanese endowments of factors of production (e.g. land, labor, capital, naturalresources).B) h igh and rising Japanese tariffs.C) a dvertising and other sales promotion efforts.D) A ll of the above.15) I nternational tradeA) a ccounts for more than 90 percent of world economic activity.B) i s a relatively small (about 30 percent of world output) but growing part of worldeconomic activity.C) h as been growing at about the same rate as the world economy.D) B oth A and C.True or False Questions1) A country's GNP is always larger than its GDP.2) A country's index of openness can never exceed 100 in value.3) G rowth in per capita GNP in developing countries has tended to be much more variable inrecent years than per capita GNP growth rates in industrialized countries.4) I f a country is industrialized then prolonged periods of negative growth in GNP per capitashould not be a cause for concern.5) B etween 1980 and 2000, virtually all countries have become more open.6) L arge countries tend to be more open than small countries.7) A s measured by the index of openness, the United States is relatively closed, and yet, it wasthe world's largest exporter in 2000.8) T ravel services include purchases of items by residents of one country when they travel toanother country.9) C ountries have trade surpluses when they export more than they import.10) M ost of world trade is in the form of manufactured consumer goods such as TVs, stereos,VCRs, and running shoes.。