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1) A demand switching policy could be ? a. Higher interest rates b. Higher income tax c. Tariffs d. Reduced government spending
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2) What is not a feature of the EU as a single market ? a. Elimination of border controls b. No import taxes on goods bought in another members country c. Each country can retain its own technical standards d. Common security arrangements
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3) When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ? a. trade diversion b. trade channeling c. trade creation and trade diversion d. trade creation
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4) Economic integration ? a. occurs when countries are granted most favored nation status b. occurs when one country voluntarily agrees to reduce its exports to another country c. occurs when two or more nations join to form a free-trade zone d. Occurs when countries develop an acquired comparative advantage that makes their industries more competitive in international markets
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5) Tariffs are used to protect infant industries these industries are those which ? a. employ many young or untrained workers b. are competing with well-established overseas firms c. are not yet large enough to achieve economies of scale d. use a new technology
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6) If the Uk placed a limit on the amount of steel that could be imported into the UK in a particular period this would be an example of ? a. a quota b. dumping c. a tariff d. an export subsidy
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7) One of the main advantages of trade economists suggest is ? a. technological change b. competitions with foreign suppliers c. development of tourism d. lower tariffs
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8) A country has a comparative advantage in the production of a product if the good’s _____ cost in different from the good’s _____ cost in another country ? a. resource; resource b. foreign exchange money c. opportunity; opportunity d. money; opportunity
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9) A significant portion of actual world trade patterns results from ? a. The industrial policies of governments b. different sizes of the countries c. different factor endowment between countries d. the different tastes and preferences of people in different countries
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10) The most wave of globalization which began in the 1980s has emphasized the outsourcing of ? a. services and white-collar jobs b. manufacturing and blue-collar jobs c. natural resource extraction and mining jobs d. agriculture and farming jobs
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