1. The proportion of population in the United States employed in agriculture has been

a. increasing since 1910.

b. basically unchanged for the last 100 years.

c. declining due to the improved technology of production.

d. about 15 percent.

e. about 20 percent.

2. The North American Free Trade Agreement affects trade between

a. the United States, Cuba and Brazil.

b. the United States, Canada and Mexico.

c. the United States, Puerto Rico and Cuba.

d. Brazil, Bolivia, Peru and Columbia.

e. China and the United States.

3. The nation of Exland is considered a less-developed country and has the following characteristics. Which one is NOT typical of a less-developed country?

a. High illiteracy

b. High unemployment

c. Rapid growth of technology

d. Rapid population growth

e. All are typical of less-developed countries

4. Suppose the exchange rate of the dollar to the yen is U.S.$1 = 100Yen. If the price of a Toyota Camry in Japan is four million yen, what would the price of the Camry be in U.S. dollars?

a. $2,500

b. $25,000

c. $40,000

d. $250,000

e. $400,000

5. Which of the following is NOT currently happening in the U.S. economy?

a. Oil and gas prices are near record levels.

b. Interest rates are falling.

c. The economy is experiencing "solid" growth in real GDP (around 3.5%).

d. The federal government is experiencing large deficits.

e. The United States is experiencing large trade deficits.

6. Three major economic factors of production are land (natural resources), labor and capital. Which of the following groups best illustrate these features?

a. Petroleum, chemical engineers and salaries

b. Iron ore, steelworkers and investors

c. Interest, dividends and capital gains

d. Gold, bankers and money

e. Apple trees, farmers and trucks

7. Some companies are closing their U.S. plants and moving production overseas. This is called

a. dumping.

b. predatory hiring.

c. outsourcing.

d. unfair wage competition.

e. sweat shop diplomacy.

8. A limit on the quantity of a good that may be imported in a given time period is known as

a. a trade restriction limit.

b. a quota.

c. a tariff.

d. the price effect.

e. an embargo.

9. If the opportunity cost of producing cheese is higher in Greece that it is in Italy, then with specialization and trade

a. Greece should specialize in producing cheese.

b. Italy should specialize in producing cheese.

c. both Greece and Italy should produce cheese.

d. Italy has a better economy than Greece.

e. none of the above.

10. Trade barriers such as tariffs and quotas on foreign goods

a. lead to a more efficient use of domestic resources.

b. lead to less competitive conditions in the domestic economy.

c. increase the mobility of goods.

d. reduce the domestic prices of goods.

e. are beneficial for the country imposing them, but harmful to world production as a whole.

11. An economic system is said to be a

a. market system if there is substantial central planning.

b. traditional system if it is based on consumer sovereignty.

c. command system if it is based on private ownership of property.

d. market system if it relies on self-interested behavior based on incentives.

e. command system if it relies on long-standing practices and traditions.

12. A tariff is a tax on ______ goods that is designed to ________.

a. exported; protect domestic industries

b. exported; protect foreign industries

c. imported; help foreign industries

d. imported; protect domestic industries

e. domestic; discourage imports

13. The U. S. has been running trade deficits for many years. How are most of these deficits financed each year?

a. By selling exports of U.S. goods and services

b. By selling U.S. securities or assets to other nations

c. By selling U.S. gold reserves to other nations

d. By printing the extra dollars needed (which invariably leads to a depreciations in the value of the U.S. dollar)

e. By direct payments by the U.S. government (which is one reason it is running such large deficits)

14. If total exports by the United States exceed total imports to the United States, then the United States is experiencing:

a. budget surplus.

b. budget deficit.

c. balance of trade surplus.

d. balance of trade deficit.

e. balance of payments surplus.

15. The primary purpose of the World Trade Organization (WTO) is to:

a. protect the United States from cheap foreign labor.

b. increase worldwide tariffs..

c. promote increased trade among nations.

d. form a union of European nations.

e. promote the dumping of agriculture products.

Answers:

1-C
2-B
3-C
4-C
5-B  (This is a interesting one.  Interest Rates were rising back in 2006.  Imagine what was happening if you had a ARM mortgage.
6-E
7-C
8-B
9-B
10-B
11-D
12-D
13-B
14-C
15-C