Chapter 1 An Introduction to International Trade
1.1 Multiple-Choice Questions
1) Countries of the world differ in terms of their
A) geographic size.
B) population size.
C) standards of living.
D) All of the above.
2) The difference between a country’s Gross National Product (GNP) and its Gross Domestic
product (GDP) is that
A) GNP refers to production within the nation while GDP refers to production by domestic
factors no matter where they are located.
B) GNP is always bigger than GDP.
C) GDP refers to production within the nation while GNP refers to production by domestic
factors no matter where they are located.
D) Two of the above are true.
3) Per capita GNP is defined as a country’s GNP divided by its
A) population.
B) labor force.
C) capitalists.
D) None of the above.
4) Which of the following statements is false?
A) Richer countries tend to be found in North America, Western Europe, and Japan.
B) Countries with large populations tend to be rich.
C) Growth of per capita GNP tends to be quite stable about 1.5-3 percent per year in
industrialized countries.
D) Over the past several decades, growth of per capita GNP tends to be higher on average in
industrialized countries than in low or middle-income countries.
5) The ratio of a country’s exports to its total output (GNP or GDP)
A) is known as the index of openness.
B) provides a rough measure of the importance of international trade to that economy.
C) if calculated for the United States would be quite low.
D) All of the above.
.
6) Which of the following statements is false?
A) Between 1980 and 2006, the index of openness has risen for most countries.
B) Since 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) Two of the above are true.
7) Barriers to trade
A) include government policies such as tariffs and quotas.
B) have been falling with technological improvements in transportation and communication.
C) have risen since World War II as many countries have imposed higher tariffs.
D) Two of the above are true.