Chapter 02

The Dynamic Environment of International Trade

True / False Questions
1.Trade barriers are pesky hurdles to peace and prosperity.

2.With respect to total trade, the United States trades more with Mexico than any other country.

3.At no time in modern economic history have countries been more economically interdependent.

4.For almost one hundred years (1888-1971) the U.S. had a trade deficit. Since then, the U.S. has
had a trade surplus.

5.Following the great economic boom of the late 1990s British corporations were no longer
among the world's largest corporations.

Multiple Choice Questions

1.American beef continues to be excluded in this country's diet based on disputes about mad cow
disease.
A. Japan
B. Mexico
C. Canada
D. United Kingdom
E. China

2.The United States has many successful trade relationships. Four of these relationships account
for a tremendous volume of trade. All of the following countries are among the top four producers
of trade for the U.S. EXCEPT:
A. Canada
B. Mexico
C. Japan
D. France
E. China

3.With respect to international trade, MNC stands for:

A. Municipal, National, and County districts
B. Multilateral and National Cartels
C. Multinational Corporations
D. Military and National Control districts
E. Market Nongovernment Channels
4.After 1888, the United States had unparalleled growth and a favorable balance of trade until
_________. After this date, the United States has a negative balance of trade.
A. 1950
B. 1963
C. 1968
D. 1971
E. 1985

5.Faced with increased competition for U.S. businesses in the '80s and early '90s, questions were
raised as to how to maintain the competitive strength of American business, how to avoid the
domination of U.S. markets by foreign multinationals, and how to __________.
A. restructure heavy industries
B. strengthen the dollar
C. initiatite retalitory trade restrictions
D. forestall the buying of America
E. return to the gold standard

Essay Questions
1.In his 1968 book called The American Challenge, French author J.J. Servan-Schreiber made
certain predictions about the European market. Briefly characterize those predictions.

2. Describe what happened to the United States with respect to its balance of trade after 1971.