Which of the Following Statements Is Not True

question 142

Multiple Choice

Which of the following statements is not true?

• A) Although the mercantilist era ended in the late 1700s, its arguments live on.
• B) Many of the world's managers see China as a present-day "fortress of mercantilism" that raises barriers to imported goods while giving its own exporters an unfair advantage.
• C) Many people see trade as a zero-sum activity, in which one party must lose for another to gain. We still use the term favorable trade balance to mean a nation exports more goods and services than it imports.
• D) Mercantilism generated benefits for certain economic groups, such as emerging industrialists and shippers, though at a cost to other groups including consumers.
• E) Mercantilists viewed precious metals such as gold and silver as the only source of wealth, and their accumulation as essential to a nation's welfare.

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Definitions:

Trade Deficit

A situation where a country's imports of goods and services exceed its exports of them.

Peso Price

The value of a good or service expressed in pesos, the currency of various Latin American countries.

Exchange Rate Appreciation

Exchange rate appreciation refers to the increase in value of one currency relative to another, meaning you need fewer units of the appreciating currency to buy one unit of another currency.

Domestic Deflation

A decline in the general price level of goods and services within a domestic economy over a period of time.