Question

1, If a country imports more than it exports, then

a. It will not affect the GDP.

b. Its GDP will decrease.

c. Its GDP will increase.

2, Production of goods and services has become globalized to a large extent as a result of

a. multinational corporations' efforts to source inputs and locate production anywhere where costs are lower and profits higher.

b. common tastes worldwide for the same goods and services.

c. natural resources being depleted in one country after another.

3, Japan has experienced large trade surpluses. Japanese investors have responded to this by

a. lobbying the U.S. government to depreciate its currency.

b. lobbying the Japanese government to allow the yen to appreciate.

c. investing heavily in U.S. and other foreign financial markets.

d. liquidating their positions in stocks to buy dollar-denominated bonds.

4, During the period of the classical gold standard (1875-1914) there were

a. stable exchange rates.

b. volatile exchange rates.

c. No need for exchange rates because of limited trade.

5, How was the World Bank created?

a. As a result of the Bretton Woods agreement

b. As a result of the Maastrich Treaty

c. As a result of establishment of the Federal Reserve System

d. As a result of the formation of the European Union

Answer 1

1. When a country imports, it means that the money is flowing out of the country to the other nation and it will decrease the overall Gross Domestic product.

When a country is exporting, it means that the goods and services of the country is flowing out but the money related to those goods and services are flowing in, so it would lead to increase in the overall Gross Domestic product of the country

so in a scenario when the country imports more than it exports, then the overall Gross Domestic product will decrease.

Correct answer is option ( B) GDP will decrease.