Question : 31) If exchange rates fixed, then an increase in Canada’s : 1381289

31) If exchange rates are fixed, then an increase in Canada’s export prices causes

A) U.S. import prices to fall.

B) U.S. import prices to rise.

C) Canadian import prices to fall.

D) Canadian import prices to rise.

32) The U.S. and Japan heavily trade with each other. Which of the following is TRUE?

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

B) U.S. prices increase ⇒ U.S. imports increase ⇒ Japanese prices increase.

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

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

33) The U.S. and Canada heavily trade with each other. Which of the following is TRUE?

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

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

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

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

34) Japan imports over 90% of its consumption of oil. If the price of oil increases, Japan’s

A) aggregate demand curve shifts to the right.

B) aggregate supply curve shift to the right.

C) aggregate supply curve shifts to the left.

D) aggregate planned expenditures increase.

35) If two countries don’t trade with each other, an increase in the price level in one country

A) increases the price level in the other country.

B) decreases the price level in the other country.

C) increases the price level in the other country then decreases it.

D) does not affect the price level in the other country.

36) U.S. exports tend to decrease when

A) economic activity abroad is decreasing.

B) foreign GDPs are rising.

C) U.S. prices are low relative to those in the rest of the world.

D) the inflation rate in the United States is lower than the inflation rates in other countries.

37) U.S. exports tend to increase when

A) economic activity abroad is increasing.

B) foreign GDPs are falling.

C) U.S. prices are rising compared to the rest of the world.

D) the value of the dollar rises.

38) U.S. exports tend to decrease when

A) economic activity abroad is increasing.

B) foreign GDPs are rising.

C) U.S. prices are rising relative to those in the rest of the world.

D) the U.S dollar is weak compared to foreign currencies.

39) U.S. exports tend to increase when

A) economic activity abroad is decreasing.

B) foreign GDPs are falling.

C) U.S. prices are falling compared to those in the rest of the world.

D) the U.S. dollar is strong compared to foreign currencies.

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

A) an increase in the prices of imported inputs will cause aggregate supply to increase.

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

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

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

41) Suppose that an increase in the price level of one country drives up prices in other countries. This, in turn, increases the price level in the first country. This process is the

A) J-curve effect.

B) trade feedback effect.

C) price feedback effect.

D) balance of trade effect.

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

A) decline; growth; growth

B) decline; decline; further decline

C) growth; growth; further growth

D) growth; decline; growth