TEST BANK
All Chapters 100% Original Verified A+
Grade.
All Chapters Arranged Reverse: 15-1
Macroeconomics
Canada in the Global Environment
Twelfth Edition
Michael Parkin
Robin Bade
This is the Only Original and Complete Test Bank for
12th Edition, All other files in the Market are Fake/Old/
Wrong Edition.
,Macroeconomics: Canada in the Global Environment, 12e (Parkin)
Chapter 15 International Trade Policy
15.1 How Global Markets Work
1) Which of the following statements about Canada's international trade in 2024 is correct?
A) If the value of Canada's imports exceeded the value of Canada's exports, Canada would have
a trade deficit.
B) If the value of Canada's exports was 45 percent of the value of total expenditure in Canada, it
would have a trade surplus.
C) If Canada only imported goods made by cheap labour in other countries, Canada would have
a trade surplus.
D) Canada would gain from international trade if it exported only minerals and no agricultural
production.
E) If Canada exported only goods and imported only services, it would have unbalanced trade.
Answer: A
Diff: 1 Type: MC
Topic: How Global Markets Work
2) What is the fundamental force that drives trade between countries?
A) a country's absolute advantage
B) a country's import duties
C) a country's diversified production
D) a country's range of exports
E) a country's comparative advantage
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
3) What is the fundamental force that drives trade between countries?
A) Each country has a different comparative advantage.
B) Each country has a different absolute advantage.
C) Each country's desire is to increase its trade surplus.
D) Developed countries prefer goods made by cheap labour in countries like China and India.
E) Countries look for ways to use their unemployed factors of production
Answer: A
Diff: 2 Type: MC
Topic: How Global Markets Work
1
.
,4) Why does Canada have a comparative advantage in producing small airplanes?
A) It can produce an airplane at a lower dollar cost than another country.
B) It can produce a larger quantity of airplanes than another country.
C) It has a larger quantity of skilled workers than another country.
D) It can produce an airplane at a higher opportunity cost than another country.
E) It can produce an airplane at a lower opportunity cost than another country.
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
5) If prior to international trade, the price of good X is lower in country A than in country
B, which of the following statements is correct?
A) Country B has an absolute advantage in the production of good X.
B) Country B has a comparative advantage in the production of good X.
C) Country A has an absolute advantage in the production of good X.
D) Country A has a comparative advantage in the production of good X.
E) Country B should stop producing good A.
Answer: D
Diff: 2 Type: MC
Topic: How Global Markets Work
6) In which of the following situations would Canada have a comparative advantage in
producing hardwood?
If the Canadian price of hardwood before international trade is ________ the world price.
A) equal to
B) greater than
C) at most double
D) at least double
E) less than
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
7) Which of the following statements is correct?
A country
A) imports those goods in which it has a comparative advantage.
B) exports those goods in which it has a comparative advantage.
C) imports goods produced in countries with lower wage rates.
D) exports goods produced by domestic industries with low wages relative to other countries.
E) B and D are correct.
Answer: B
Diff: 1 Type: MC
Topic: How Global Markets Work
2
.
, 8) When Canada switches from no trade to free trade and imports good Y, which of the
following events occur?
Production of good Y in Canada ________ and consumption of good Y in Canada ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) does not change; increases
Answer: C
Diff: 1 Type: MC
Topic: How Global Markets Work
Figure 15.1.1
9) Refer to Figure 15.1.1, which shows the market for shirts in Canada when it does not
trade internationally. If the world price is $20 per shirt and Canada decides to trade
internationally, which of the following outcomes will occur?
Canadians buy ________ million shirts per year and Canada produces ________ million shirts
per year.
A) 48; 16
B) 32; 32
C) 16; 48
D) 24; 40
E) 56; 8
Answer: A
Diff: 2 Type: MC
Topic: How Global Markets Work
3
.
All Chapters 100% Original Verified A+
Grade.
All Chapters Arranged Reverse: 15-1
Macroeconomics
Canada in the Global Environment
Twelfth Edition
Michael Parkin
Robin Bade
This is the Only Original and Complete Test Bank for
12th Edition, All other files in the Market are Fake/Old/
Wrong Edition.
,Macroeconomics: Canada in the Global Environment, 12e (Parkin)
Chapter 15 International Trade Policy
15.1 How Global Markets Work
1) Which of the following statements about Canada's international trade in 2024 is correct?
A) If the value of Canada's imports exceeded the value of Canada's exports, Canada would have
a trade deficit.
B) If the value of Canada's exports was 45 percent of the value of total expenditure in Canada, it
would have a trade surplus.
C) If Canada only imported goods made by cheap labour in other countries, Canada would have
a trade surplus.
D) Canada would gain from international trade if it exported only minerals and no agricultural
production.
E) If Canada exported only goods and imported only services, it would have unbalanced trade.
Answer: A
Diff: 1 Type: MC
Topic: How Global Markets Work
2) What is the fundamental force that drives trade between countries?
A) a country's absolute advantage
B) a country's import duties
C) a country's diversified production
D) a country's range of exports
E) a country's comparative advantage
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
3) What is the fundamental force that drives trade between countries?
A) Each country has a different comparative advantage.
B) Each country has a different absolute advantage.
C) Each country's desire is to increase its trade surplus.
D) Developed countries prefer goods made by cheap labour in countries like China and India.
E) Countries look for ways to use their unemployed factors of production
Answer: A
Diff: 2 Type: MC
Topic: How Global Markets Work
1
.
,4) Why does Canada have a comparative advantage in producing small airplanes?
A) It can produce an airplane at a lower dollar cost than another country.
B) It can produce a larger quantity of airplanes than another country.
C) It has a larger quantity of skilled workers than another country.
D) It can produce an airplane at a higher opportunity cost than another country.
E) It can produce an airplane at a lower opportunity cost than another country.
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
5) If prior to international trade, the price of good X is lower in country A than in country
B, which of the following statements is correct?
A) Country B has an absolute advantage in the production of good X.
B) Country B has a comparative advantage in the production of good X.
C) Country A has an absolute advantage in the production of good X.
D) Country A has a comparative advantage in the production of good X.
E) Country B should stop producing good A.
Answer: D
Diff: 2 Type: MC
Topic: How Global Markets Work
6) In which of the following situations would Canada have a comparative advantage in
producing hardwood?
If the Canadian price of hardwood before international trade is ________ the world price.
A) equal to
B) greater than
C) at most double
D) at least double
E) less than
Answer: E
Diff: 1 Type: MC
Topic: How Global Markets Work
7) Which of the following statements is correct?
A country
A) imports those goods in which it has a comparative advantage.
B) exports those goods in which it has a comparative advantage.
C) imports goods produced in countries with lower wage rates.
D) exports goods produced by domestic industries with low wages relative to other countries.
E) B and D are correct.
Answer: B
Diff: 1 Type: MC
Topic: How Global Markets Work
2
.
, 8) When Canada switches from no trade to free trade and imports good Y, which of the
following events occur?
Production of good Y in Canada ________ and consumption of good Y in Canada ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
E) does not change; increases
Answer: C
Diff: 1 Type: MC
Topic: How Global Markets Work
Figure 15.1.1
9) Refer to Figure 15.1.1, which shows the market for shirts in Canada when it does not
trade internationally. If the world price is $20 per shirt and Canada decides to trade
internationally, which of the following outcomes will occur?
Canadians buy ________ million shirts per year and Canada produces ________ million shirts
per year.
A) 48; 16
B) 32; 32
C) 16; 48
D) 24; 40
E) 56; 8
Answer: A
Diff: 2 Type: MC
Topic: How Global Markets Work
3
.
