ECON 306 Final Prep Questions with Correct Answers Latest Update 2025/2026
In the United States, the proposed North American Free Trade Agreement was generally
supported by... - Answers Hi-skill labor
Suppose that the United States, Canada, and Mexico abolish all tariffs on each other's goods
and eliminate all restrictions on movements of resources between each other. They also adopt
a common protectionist policy toward other countries. The three countries further maintain their
own respective monetary and fiscal policies. This is an example of a (an)... - Answers Common
Market
The sum of all of the debit items in the balance of payments: - Answers Is = to the sum of all
credit items in the balance of payments
Which of the following statements is TRUE? - Answers The world bank was created as a result
of the Bretton Woods Conference
Deadweight losses from tariffs and quotas in high-income countries - Answers have been
reduced since the mid-1990s.
Which of the following is a TRUE statement? - Answers There are asymmetric incentives to
support and to oppose protectionist trade policies, with the stronger incentives going to those
that would seek protection.
If a country faces action under Section 301 of the U.S. Trade Act of 1974, it means that the
country has - Answers been charged by the United States with systematically engaging in unfair
trade practices.
A nation is called a lender if: - Answers its current account is in surplus during a time period.
Which of the following is NOT true about the national income identity given by the equation: S +
T - G - I = NX - Answers If NX is negative, our investment is less than our national savings.
Which of the following is NOT part of the current account? - Answers Purchase of a foreign
bond
Suppose that there are only two countries, the U.S. and Japan. If real interest rates rise in Japan,
which of the following is NOT true? - Answers More Japanese yen will be supplied in exchange
for dollars.
The nominal interest rate in the U.S. is 5% and the nominal interest rate in Canada is 3%. The
spot value of the U.S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian
dollar). Which of the following is NOT true? - Answers The dollar is likely to appreciate in spot
markets.
If the nominal exchange rate does not change, but U.S. prices rise, the real exchange rate has
In the United States, the proposed North American Free Trade Agreement was generally
supported by... - Answers Hi-skill labor
Suppose that the United States, Canada, and Mexico abolish all tariffs on each other's goods
and eliminate all restrictions on movements of resources between each other. They also adopt
a common protectionist policy toward other countries. The three countries further maintain their
own respective monetary and fiscal policies. This is an example of a (an)... - Answers Common
Market
The sum of all of the debit items in the balance of payments: - Answers Is = to the sum of all
credit items in the balance of payments
Which of the following statements is TRUE? - Answers The world bank was created as a result
of the Bretton Woods Conference
Deadweight losses from tariffs and quotas in high-income countries - Answers have been
reduced since the mid-1990s.
Which of the following is a TRUE statement? - Answers There are asymmetric incentives to
support and to oppose protectionist trade policies, with the stronger incentives going to those
that would seek protection.
If a country faces action under Section 301 of the U.S. Trade Act of 1974, it means that the
country has - Answers been charged by the United States with systematically engaging in unfair
trade practices.
A nation is called a lender if: - Answers its current account is in surplus during a time period.
Which of the following is NOT true about the national income identity given by the equation: S +
T - G - I = NX - Answers If NX is negative, our investment is less than our national savings.
Which of the following is NOT part of the current account? - Answers Purchase of a foreign
bond
Suppose that there are only two countries, the U.S. and Japan. If real interest rates rise in Japan,
which of the following is NOT true? - Answers More Japanese yen will be supplied in exchange
for dollars.
The nominal interest rate in the U.S. is 5% and the nominal interest rate in Canada is 3%. The
spot value of the U.S. dollar is 1 ($/Canadian dollar) and the forward rate is 1.2 ($/Canadian
dollar). Which of the following is NOT true? - Answers The dollar is likely to appreciate in spot
markets.
If the nominal exchange rate does not change, but U.S. prices rise, the real exchange rate has
