Classical

Advanced Questions - Section 2

11:  

The implementation of a common market involves all of the following except

A.

elimination of trade restrictions among member countries

B.

a common tax system and monetary union

C.

prohibition of restrictions on factor movements

D.

a common tariff levied in imports from nonmembers

 
 

Option: B

Explanation :


12:  

During the era of dollar appreciation, from 1981 to 1985, a main reason why the dollar did not fall in value was

A.

flows of foreign investment into the United States

B.

rising price inflation in the United States

C.

a substantial decrease in U.S. imports

D.

a substantial increase in U.S. exports

 
 

Option: A

Explanation :


13:  

When several countries jointly impose common external tariffs, eliminate tariffs on each other, and eliminate barriers to the movement of labor and capital among themselves, they have formed a/an

A.

free trade area

B.

customs union

C.

common market

D.

economic union

 
 

Option: C

Explanation :


14:  

Small nations with more than one major trading partner tend to peg the value of their currencies to

A.

gold

B.

silver

C.

a single currency

D.

a basket of currencies

 
 

Option: D

Explanation :


15:  

_____ represent the most widely used tool in international finance for measuring the average value of a currency relative to a number of other currencies.

A.

nominal exchange rates

B.

real exchange rates

C.

cross exchange rates

D.

exchange rate indexes

 
 

Option: C

Explanation :




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