All the countries of the EU participate in the Schengen Agreement.
Indicate whether the statement is true or false
Question 2 - People sometimes worry that American trade with other countries will lead to large U.S. trade deficits and the movement of massive amounts of American capital out of the country. This worry is unfounded because countries cannot
A) increase savings at the same time that a trade deficit grows.
B) spend more than they earn.
C) invest more than they save.
D) have both current account and financial account deficits at the same time.
E) increase their trade with other countries without increasing their savings.
Question 3 - The fact that the balance of trade normally falls before increasing after a devaluation is known as
A) the J-curve.
B) the pass-through effect.
C) the balance of payments paradox.
D) the indifference reflection.
Question 4 - Since World War II, the likelihood that the job of a new college graduate will be directly or indirectly affected by world trade
A) remained constant.
B) increased.
C) decreased.
D) fluctuated widely with no clear trend.
E) increased slightly before dropping off.
Question 5 - If output is increased in the long-run, then in the presence of internal economies of scale the number of firms will ________, and in the presence of constant external returns to scale the number of firms will ________.
A) decrease; decrease
B) increase; remain constant
C) remain constant; increase
D) decrease; remain constant
E) increase; decrease
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