Chapter 1 True/False Questions 1. Foreign Direct Investment (FDI) around the world taken as a percentage of the world GDP, declined during 1980 to 2005, suggesting an overall decrease in the interconnectedness between nations. False; Moderate 2. Under the Uruguay round of trade discussions countries not only agreed to lower tariffs on goods trade but also began to liberalize the agriculture and services markets. True; Easy 3. International finance is a subfield in international economics that applies microeconomic models to help understand the effects of trade policies on business and economics. False; Easy 4. The focus of international trade is primarily on the significance of trade imbalances, the determinants of exchange rates, and the aggregate effects of government monetary and fiscal policies. False; Easy 5. A complete elimination of tariffs and other barriers to trade is called protectionism. False; Easy 6. If both a specific tariff as well as an ad valorem tariff is imposed on an imported product simultaneously, it is subject to two-part tariff. True; Easy 7. Average tariff rates are generally higher in developed countries compared to developing countries. False; Easy 8. If a country has most of its trade in a few categories with high tariffs but has zero tariffs in many categories, the averag