7. What happened to the "Second Bank of the United States," created in 1816?
A. Its demise began when President John Quincy Adams, who hated the idea of a
central bank, refused to support it.
B. It was broke and went out of business in the Civil War.
C. Its demise began when President Andrew Jackson vetoed renewal and had
government deposits placed in state banks.
D. It was superseded by the "Third Bank of the United States."
E. It ended in 1913 with the creation of the Federal Reserve System.
8. An ad valorem tariff on imports is
A. an upper limit on the amount of a good that can be imported.
B. an upper limit on the amount of a good that can be exported.
C. a tax placed on the value of an exported good.
D. a tax placed on the value of an imported good.
E. a tax placed on the price of a good if the domestic price is lower than the world
price.
9. The world has two countries, A and Z, which each produce two products, gadgets and
whizbangs. Without world trade, the domestic price of gadgets in A is lower than the price
of gadgets in Z. We can say that
A. Country A has a comparative advantage in gadgets and should be exporting them.
B. Country Z should specialize in producing gadgets.
C. Country A has a comparative advantage in whizbangs and should be importing
them.
D. Country A has a comparative disadvantage in gadgets and should be exporting
them.
E. Country A has an absolute disadvantage in gadgets and should be exporting them.
10. When a country opens its markets for trading with the world and begins to specialize, then,
within the country, we can say that
A. everyone is better off, including all consumers and producers.
B. domestic producers win, and consumers lose.
C. overall benefits exceed overall costs for the country as a whole.
D. everyone is worse off, both the producers and the consumers.
E. domestic consumers win, and producers lose.