Globalization in the World Economy Quiz

Question 1An illustrative economy has exports of $84 million, imports of $66 million, and output of $500 million. Define trade share as exports plus imports divided by output. Find it in percent, rounded to one decimal place.

Enter a number in %.

Answers within 0.05 % of the expected value are accepted.

Question 2A machine costs 720 foreign currency units. One domestic unit buys 1.8 foreign units. Find the cost in domestic units, rounded to two decimals.

Enter a number in domestic units.

Answers within 0.005 domestic units of the expected value are accepted.

Question 3A firm specializes in a task it gives up relatively little to perform, then trades for other inputs. What explains the potential gain?

Higher export prices proving that domestic production is inefficientMore international invoices creating additional physical resourcesLower opportunity costs guiding the division of workLarger factories removing the need to compare alternatives

Question 4When input prices rise, suppliers in different economies adjust purchases. What coordinates these dispersed decisions?

Price signals alongside contracts and production schedulesA global manager setting household purchase quantitiesThe nationality of a product label replacing cost calculationsTransport distance determines the price before demand is known

Question 5A country trades and receives foreign investment while retaining import tariffs. Which description fits?

Free trade defined by the presence of foreign investmentCross-border integration under restrictions on product tradeEconomic isolation because a tariff existsAn end to international finance caused by customs charges

Question 6Cheaper imports benefit consumers while workers in one industry lose jobs. Which conclusion about distribution is supported?

Losses in the affected industry show that buyers also loseThe lower prices establish that displaced employees have been rehiredCheaper goods raise nominal pay throughout the affected industryLower purchase costs do not ensure gains for displaced employees

Question 7After installing machinery, a factory raises output while employment falls. What should an investigator test before attributing the job loss to imports?

Imported sales elsewhere directly specify the factory’s payroll changeThe requirement that reduced staffing means reduced outputThe contribution of automation to the change in labor needsThe share price as a count of positions replaced by overseas labor

Question 8Imports exceed exports during an accounting period. What does the trade deficit describe?

A difference between the values of two flowsImporters’ operating losses added over the reporting periodA public-sector deficit arising from privately purchased importsThe foreign suppliers’ outstanding bills at the period’s end

Question 9An enterprise has its headquarters in one country but suppliers, owners, and workers elsewhere. What best locates its economic effects?

Crediting headquarters with the wages paid to overseas employeesUsing the founder’s birthplace to locate current productionCounting the languages on its logo as national income sharesTracing wages, purchases, profits, and tax payments

Question 10A low-cost supply chain relies on one specialist supplier and minimal stocks. What trade-off matters during a disruption?

Small inventories make substitute inputs arrive instantlyLean operations reduce buffers against a supply interruptionSpecialization spreads the same task across independent suppliersLow normal cost ensures rapid recovery from an outage

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Globalization in the World Economy Quiz

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