When economists talk about the gains from trade they mean that
A) no one ever gets hurt by trade.
B) the benefits of trade outweigh the losses.
C) business firms benefit from trade but not necessarily individuals.
D) trade increases government revenue through taxes on imports.
E) economic restructuring is usually quick and painless.
Question 2 - A major reason for creating the European Monetary System was to
A) create a single currency.
B) unify banking laws and permit cross-border investment.
C) avoid competitive devaluations.
D) eliminate the need for central banks.
Question 3 - Discriminatory trade practices are allowed among sister WTO member countries, especially when it comes to
A) the use of child labor in agricultural and textile/apparel products.
B) national security and special benefits given to other members of a free trade area.
C) the protection of agriculture and textile/apparel from open trade.
D) environmental protection.
Question 4 - Expansionary monetary policy involves an increase in the money supply and a fall in interest rates, leading to a positive expansion in income.
Indicate whether the statement is true or false
Question 5 - All of the following are true EXCEPT
A) trade between two nations reduces their opportunity costs.
B) trade makes nations dependent on each other.
C) trade between nations will not benefit all citizens.
D) the principle of comparative advantage does not apply to countries with limited resources.
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