Econ 2 [ACTUAL EXAM ] LATEST VERSION
[QUESTIONS AND ANSWERS] DETAILED AND
VERIFIED FOR GUARANTEED PASS- LATEST
UPDATE 2025 GRADED A (BRAND NEW!!)
When a country takes a unilateral approach to free trade, it
a. reduces its trade restrictions while other countries do the same.
b. removes trade restrictions on its own.
c. is willing to trade with multiple countries at once.
d. does not remove trade restrictions no matter what other countries
do. - CORRECT ANSWER ✔✔✔✔✔ b
A tariff is a
a. limit on how much of a good can be exported.
b. tax on an exported good.
c. tax on an imported good.
d. limit on how much of a good can be imported. - CORRECT
ANSWER ✔✔✔✔✔ c
Some goods can be produced at low cost only if they are produced in
large quantities. This phenomenon is called
a. economies of production.
b. marginal cost of production.
c. economies of scale.
d. marginal benefit of size. - CORRECT ANSWER ✔✔✔✔✔ c
,The North American Free Trade Agreement
a. is an example of the unilateral approach to free trade.
b. eliminated tariffs on imports to North America from the rest of the
world.
c. reduced trade restrictions among Canada, Mexico and the United
States.
d. All of the above are correct. - CORRECT ANSWER ✔✔✔✔✔ c
The problem with the protection-as-a-bargaining-chip argument for
trade restrictions is
a. if it works producer surplus falls.
b. if it fails total surplus will increase.
c. if it works consumer surplus will decline.
d. if it fails the country faces a choice between two bad options. -
CORRECT ANSWER ✔✔✔✔✔ d
The price of a good that prevails in a world market is called the
a. absolute price.
b. relative price.
c. world price.
d. comparative price. - CORRECT ANSWER ✔✔✔✔✔ c
The General Agreement on Tariffs and Trade (GATT) was initiated in
response to
a. in increase in exports of low-priced goods from developing
countries to developed countries.
,b. high tariffs imposed during the Great Depression of the 1930s.
c. the replacement of manufacturing jobs with service jobs in
developed countries.
d. economic dislocations caused by the North American Free Trade
Agreement (NAFTA) in the 1990s. - CORRECT ANSWER ✔✔✔✔✔ b
A quota is
a. a tax on exports to other countries.
b. an excess of exports over imports.
c. a tax placed on imports.
d. a limit on the quantity of imports. - CORRECT ANSWER ✔✔✔✔✔
d
Economists view the fact that Florida grows oranges, Texas pumps
oil, and California makes wine as
a. confirmation of the virtues of free trade.
b. confirmation that specialization in absolute advantage works.
c. confirmation of the infant-industry argument.
d. confirmation that free trade agreements are not necessary. -
CORRECT ANSWER ✔✔✔✔✔ a
When a country takes a multilateral approach to free trade, it -
CORRECT ANSWER ✔✔✔✔✔ reduces its trade restrictions while
other countries do the same.
GDP
, a. is not used to monitor the performance of the overall economy but
is the single best measure of a society's economic well-being.
b. is used to monitor the performance of the overall economy but is
not the single best measure of a society's economic well-being.
c. is used to monitor the performance of the overall economy and is
the single best measure of a society's economic well-being.
d. is not used to monitor the performance of the overall economy and
is not the single best measure of a society's economic well-being. -
CORRECT ANSWER ✔✔✔✔✔ c
U.S. GDP
a. excludes production of foreigners working in the U.S. and
production by U.S. residents working in foreign countries.
b. includes production of foreigners working in the U.S. but excludes
production by U.S. residents working in foreign countries.
c. excludes production of foreigners working in the U.S. but includes
production by U.S. residents working in foreign countries.
d. includes production of foreigners working in the U.S. and
production by U.S. residents working in foreign countries. -
CORRECT ANSWER ✔✔✔✔✔ b
1. The percentage change in the price level from one period to
another is called
a. the growth rate.
b. the inflation rate.
c. the GDP deflator.
d. the unemployment rate. - CORRECT ANSWER ✔✔✔✔✔ b
[QUESTIONS AND ANSWERS] DETAILED AND
VERIFIED FOR GUARANTEED PASS- LATEST
UPDATE 2025 GRADED A (BRAND NEW!!)
When a country takes a unilateral approach to free trade, it
a. reduces its trade restrictions while other countries do the same.
b. removes trade restrictions on its own.
c. is willing to trade with multiple countries at once.
d. does not remove trade restrictions no matter what other countries
do. - CORRECT ANSWER ✔✔✔✔✔ b
A tariff is a
a. limit on how much of a good can be exported.
b. tax on an exported good.
c. tax on an imported good.
d. limit on how much of a good can be imported. - CORRECT
ANSWER ✔✔✔✔✔ c
Some goods can be produced at low cost only if they are produced in
large quantities. This phenomenon is called
a. economies of production.
b. marginal cost of production.
c. economies of scale.
d. marginal benefit of size. - CORRECT ANSWER ✔✔✔✔✔ c
,The North American Free Trade Agreement
a. is an example of the unilateral approach to free trade.
b. eliminated tariffs on imports to North America from the rest of the
world.
c. reduced trade restrictions among Canada, Mexico and the United
States.
d. All of the above are correct. - CORRECT ANSWER ✔✔✔✔✔ c
The problem with the protection-as-a-bargaining-chip argument for
trade restrictions is
a. if it works producer surplus falls.
b. if it fails total surplus will increase.
c. if it works consumer surplus will decline.
d. if it fails the country faces a choice between two bad options. -
CORRECT ANSWER ✔✔✔✔✔ d
The price of a good that prevails in a world market is called the
a. absolute price.
b. relative price.
c. world price.
d. comparative price. - CORRECT ANSWER ✔✔✔✔✔ c
The General Agreement on Tariffs and Trade (GATT) was initiated in
response to
a. in increase in exports of low-priced goods from developing
countries to developed countries.
,b. high tariffs imposed during the Great Depression of the 1930s.
c. the replacement of manufacturing jobs with service jobs in
developed countries.
d. economic dislocations caused by the North American Free Trade
Agreement (NAFTA) in the 1990s. - CORRECT ANSWER ✔✔✔✔✔ b
A quota is
a. a tax on exports to other countries.
b. an excess of exports over imports.
c. a tax placed on imports.
d. a limit on the quantity of imports. - CORRECT ANSWER ✔✔✔✔✔
d
Economists view the fact that Florida grows oranges, Texas pumps
oil, and California makes wine as
a. confirmation of the virtues of free trade.
b. confirmation that specialization in absolute advantage works.
c. confirmation of the infant-industry argument.
d. confirmation that free trade agreements are not necessary. -
CORRECT ANSWER ✔✔✔✔✔ a
When a country takes a multilateral approach to free trade, it -
CORRECT ANSWER ✔✔✔✔✔ reduces its trade restrictions while
other countries do the same.
GDP
, a. is not used to monitor the performance of the overall economy but
is the single best measure of a society's economic well-being.
b. is used to monitor the performance of the overall economy but is
not the single best measure of a society's economic well-being.
c. is used to monitor the performance of the overall economy and is
the single best measure of a society's economic well-being.
d. is not used to monitor the performance of the overall economy and
is not the single best measure of a society's economic well-being. -
CORRECT ANSWER ✔✔✔✔✔ c
U.S. GDP
a. excludes production of foreigners working in the U.S. and
production by U.S. residents working in foreign countries.
b. includes production of foreigners working in the U.S. but excludes
production by U.S. residents working in foreign countries.
c. excludes production of foreigners working in the U.S. but includes
production by U.S. residents working in foreign countries.
d. includes production of foreigners working in the U.S. and
production by U.S. residents working in foreign countries. -
CORRECT ANSWER ✔✔✔✔✔ b
1. The percentage change in the price level from one period to
another is called
a. the growth rate.
b. the inflation rate.
c. the GDP deflator.
d. the unemployment rate. - CORRECT ANSWER ✔✔✔✔✔ b
