Question 8 2 points         Save 

            The equality-of-sacrifice doctrine of taxation is based on the

 

                        increasing marginal utility of income

                        increasing marginal utility of government transfer payments

                        diminishing marginal utility of income

                        diminishing marginal utility of government transfer payments

   Question 16           2 points         Save 

            According to the equality-of-sacrifice doctrine, proportional income taxes impose a(n)

 

                        greater sacrifice on lower-income households

                        lesser sacrifice on lower-income households

                        greater sacrifice on higher-income households

                        equal sacrifice on all income levels

   Question 22           2 points         Save 

            The balance of payments is more like an income statement than a balance sheet.

 

            True

            False

  

Question 24           2 points         Save 

            When Japanese investors who own hotels in Hawaii receive profits from their hotel operations, the receipt of such profits is recorded in the balance of payments as a

 

                        current account item

                        capital account item

                        settlement account item

                        unilateral transfer

   Question 26           2 points          Save 

            A nation on the gold standard would convert its currency into gold on demand.

 

            True

            False

   Question 28           2 points          Save 

            If the World Bank lends $10 million to the government of Fiji to develop new sugar cane fields, that would be seen on Fiji’s international balance of payments as a

 

                        unilateral transfer

                        settlement account entry

                        capital account entry

                        service transaction in the current account

   Question 29           2 points          Save 

            In recent years, the IMF has altered its mission from one of providing long-term loans to developing nations to one of providing short-run financial support for dealing with balance-of-payments problems.

 

            True

            False

   Question 30           2 points          Save 

            When U.S. citizens travel on United Airlines to Japan, this constitutes a debit in the U.S. balance of payments.

 

            True

            False

   Question 31           2 points          Save 

            One factor that definitely did not contribute to the deficit in the U.S. balance of payments during 2005 was

 

                        the war in Iraq

                        sales of military equipment to foreign nations

                        the large federal government deficit in the United States

                        investments abroad by U.S. companies

 

 

   Question 33           2 points          Save 

            The United States devalued the dollar twice in the 1970s to alleviate the world’s dollar shortage.

 

            True

            False

   Question 34           2 points          Save  

            The 1992 plan of the European Union calls for

 

                        the complete mobility of economic resources across EU borders

                        establishing the British pound as the common currency

                        a central banking system in Zurich

                        a federal tax system similar to that of the United States

 

   Question 36           2 points          Save 

            Tariff protection

 

                        encourages the optimum use of scarce resources

                        has no impact on use of scarce resources

                        prevents the optimum use of scarce resources

                        eliminates the scarcity of resources

   Question 37           2 points          Save 

            In a large and diversified economy like the United States, international trade usually hurts more people domestically than it helps.

 

            True

            False

   Question 39           2 points          Save 

            The only factor determining whether a country can develop a comparative advantage in production is the degree to which it has a highly skilled labor force.

 

            True

            False

 

   Question 42           2 points          Save  

            During times of recession, retaining the domestic economy’s money at home is a valid argument for restricting imports.

 

            True

            False

   Question 43           2 points          Save 

            Since the Civil War, the international trade policies of the United States have been generally

                                 

                        for free trade

                        against free trade

                        infavor of free trade since the 1930s

                        increasingly against free trade since the 1930s

   Question 45           2 points          Save 

            If a tariff is used to protect U.S. jobs,

 

                        income is transferred from consumers to protected producers

                        national production and income increase

                        national production rises but income decreases

                        the effect is neutral since imports are replaced by domestic goods

   Question 46           2 points          Save 

            The most-favored-nation clause was created in the

 

                        Trade Expansion Act of 1962

                        Marshall Plan

                        Reciprocal Trade Agreements Act of 1934

                        Canadian-American Trade Act

   Question 47           2 points          Save 

            Consider a country that initially does not interfere with imports of a given good. If the government then imposes a tariff on that good, the supply curve

 

                        shifts downward

                        remains unchanged

                        slopes upward less steeply

                        shifts upward

   Question 48           2 points          Save 

            Only in developing nations would one expect the value of either exports or imports to exceed 200 percent of gross national product.

 

            True

            False

   Question 49           2 points          Save 

            The revenue and protective purposes of a tariff are largely incompatible.

 

            True

            False