Question

QUESTION 27

1. Which of the following transactions will be recorded on Guatemala’s capital account?

   		People living in Guatemala City purchase $1,000,000 worth of household furniture from Mexico.
   		People living in Guatemala City sell $1,000,000 worth of coffee to people living in Mexico City.
   		Americans buy $1,000,000 worth of coffee from people living in Guatemala.
   		People living in Guatemala City buy, on the New York Stock Exchange, $1,000,000 worth of shares in Microsoft, Inc.
   		none of the above

1 points   

QUESTION 28

1. If the U.S. government imposes a tariff on imports of steel to America, the demand for American-made steel will

   		fall
   		rise
   		remain unchanged
   		be equally likely to rise as to fall as to remain unchanged.

1 points   

QUESTION 29

1. If all countries follow a policy of free trade, economists predict that

   		each country will export goods at which it has a comparative advantage at producing and import goods at which it has a comparative disadvantage at producing
   		each country will export goods at which it has a comparative disadvantage at producing and import goods at which it has a comparative advantage at producing
   		there will be no trade between countries – that is, no international trade taking place
   		rich countries will be made poorer by trade with poor countries
   		poor countries will be made even poorer by trade with rich countries

1 points   

QUESTION 30

1. True or false: economists believe that a country – say, the U.S. – can benefit from free trade only if the countries with which it trades also follow a policy of free trade.

   True

   False

Answer 1

27. People living in Guatemala City buy, on the New York Stock Exchange, $1,000,000 worth of shares in Microsoft, Inc.
(Buying and selling of stocks is recorded in capital account.)

28. rise
(Due to tariff, demand for domestic production rise.)

29. each country will export goods at which it has a comparative advantage at producing and import goods at which it has a comparative disadvantage at producing
(Good in which a country have a comparative advantage will be exported and good in which a country have a comparative disadvantage will be imported.)

30. True
(Countries benefit if both have free trade.)