Question : 30) The trade feedback effect includes which of the following : 1381575

 

30) The trade feedback effect includes which of the following steps?

A) an increase in U.S. exports stimulates U.S. economic activity

B) an increase in foreign imports stimulates U.S. exports

C) an increase in U.S. economic activity stimulates U.S. imports

D) all of the above

 

31) If exchange rates are fixed, then a decrease in Finland’s export prices causes

A) U.S. import prices to fall.

B) U.S. import prices to rise.

C) Finland’s import prices to fall.

D) Finland’s import prices to rise.

 

32) The United States and Canada heavily trade with each other. Which of the following is true?

A) U.S. prices increase ⇒ U.S. exports increase ⇒ Canadian prices decrease

B) U.S. prices decrease ⇒ U.S. exports decrease ⇒ Canadian prices increase

C) U.S. prices decrease ⇒ U.S. imports increase ⇒ Canadian prices increase

D) U.S. prices increase ⇒ U.S. imports increase ⇒ Canadian prices increase

33) The United States and Mexico heavily trade with each other. Which of the following is true?

A) Mexican prices increase ⇒ Mexican exports decrease ⇒ U.S. prices increase

B) Mexican prices increase ⇒ Mexican exports increase ⇒ U.S. prices decrease

C) Mexican prices decrease ⇒ Mexican exports decrease ⇒ U.S. prices decrease

D) Mexican prices decrease ⇒ Mexican exports decrease ⇒ U.S. prices increase

 

34) Switzerland imports over 90% of its consumption of wheat. If the price of wheat decreases, Switzerland’s

A) aggregate demand curve shifts to the left.

B) aggregate supply curve shift to the right.

C) aggregate supply curve shifts to the left.

D) aggregate planned expenditures decrease.

 

35) The United States and Cuba don’t trade with each other. An increase in the price level in Cuba

A) increases the price level in the United States.

B) decreases the price level in the United States.

C) increases the price level in the United States, then decreases it.

D) does not affect the price level in the United States.

 

36) When economic activity abroad is decreasing,

A) U.S. exports tend to decrease.

B) U.S. exports tend to increase.

C) the U.S. inflation rate tends to fall.

D) the U.S. inflation rate tends to rise.

37) When economic activity abroad is increasing,

A) U.S. exports tend to decrease.

B) U.S. exports tend to increase.

C) the U.S. inflation rate tends to fall.

D) the U.S. inflation rate tends to rise.

 

38) When U.S. prices are rising relative to those in the rest of the world,

A) U.S. exports tend to increase.

B) U.S. exports tend to decrease.

C) U.S. imports tend to decrease.

D) none of the above

 

39) When U.S. prices are falling relative to those in the rest of the world,

A) U.S. exports tend to increase.

B) U.S. exports tend to decrease.

C) U.S. imports tend to increase.

D) U.S exports and U.S. imports both tend to decrease

 

 

40) When the prices of a country’s imports decrease, the prices of domestic goods may decrease. This occurs because

A) a decrease in the prices of imported inputs will cause aggregate supply to decrease.

B) if import prices fall relative to domestic prices, households will tend to substitute domestically produced goods and services for imports.

C) if import prices fall relative to domestic prices, households will tend to substitute imports for domestically produced goods and services.

D) a decrease in the prices of imported inputs will cause aggregate demand to increase.

41) Suppose that a(n) ________ in the price level of one country ________ prices in other countries. This, in turn, ________ the price level in the first country. This process is the price feedback effect.

A) increase; drives up; decreases

B) increase; pushes down; decreases

C) increase; drives up; increases

D) decrease; pushes down; increases

 

42) Related to the Economics in Practice on p. 695: During the recession of 2008-2009, the ________ was evident between developed economies as economic decline in one country led to worldwide economic decline , which in turn led to further decline in the first country

A) increase in the marginal propensity to import

B) trade feedback effect

C) price feedback effect

D) floating exchange rate effect