The simultaneous export and import of airplanes by the United States is an example of A) increasing returns to scale. B) imperfect competition. C) intraindustry trade. D) interindustry trade. ANSWER C
Date: September 10th, 2020
The pauper labor theory, and the exploitation argument A) are theoretical weaknesses that limit the applicability of the Ricardian concept of comparative advantage. B) are theoretically irrelevant to the Ricardian model, and do not limit its logical relevance. C) are not relevant because the Ricardian model is based on the labor theory of value. D) […]
Date: September 10th, 2020
Which industry was first covered by a free trade agreement between Canada and the United States? What will be an ideal response? ANSWER Automobiles
Date: September 10th, 2020
If the forward rate is greater than the spot rate, what are markets signaling about their expectations for the future spot rates for the home currency? What will be an ideal response? ANSWER The home currency is expected to depreciate over the maturity period of the forward contact.
Date: September 10th, 2020
The reform movements that began in many Latin American economies in the late 1980s favored A) competitive devaluations. B) stronger military budgets. C) imports substitution policies. D) a stronger role for markets and more openness. E) more government regulation of industry. ANSWER D
Date: September 10th, 2020
Who are the major participants in the foreign exchange market? What will be an ideal response? ANSWER (1 ) Commercial banks (2 ) Corporations (3 ) Nonbank financial institutions (4 ) Central banks
Date: September 10th, 2020
The “East Asian Miracle” of the “Four Tigers” in the 1960s was replicated by A) developing countries around the world. B) other East Asian countries. C) Sub Sahara African countries. D) Industrialized countries. E) Eastern European countries. ANSWER B
Date: September 10th, 2020
If the United States and Mexico trade Budweiser for Modelo beer, what type of trade does this represent? What will be an ideal response? ANSWER Intraindustry
Date: September 10th, 2020
Which currency is most commonly traded? What will be an ideal response? ANSWER The U.S. dollar
Date: September 10th, 2020
Mahatma Gandhi exhorted his followers in India to promote economic welfare by decreasing imports. This approach A) makes no sense. B) makes no economic sense. C) is consistent with the the Ricardian model of comparative advantage. D) is not consistent with the Ricardian model of comparative advantage. E) guarantees benefits for Indian workers. ANSWER […]
Date: September 10th, 2020
