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
International Reserve assets are comprised of gold, foreign exchange, and IMF special drawing rights. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
What are the factors affecting the demand for foreign currency? What will be an ideal response? ANSWER Three factors affect the demand for foreign currency. They are expected return, risk, and liquidity.
Date: September 10th, 2020
Illustrate with a graph the effects of fiscal policy when exchange rates are fixed. What will be an ideal response? ANSWER Draw horizontal BP curve. Fiscal policy shifts IS. Monetary policy must accommodate by shifting LM to match IS in order to maintain fixed exchange rate.
Date: September 10th, 2020
The most common form of price discrimination in international trade is A) dumping. B) non-tariff barriers. C) Voluntary Export Restraints. D) preferential trade arrangements. E) product boycotts. ANSWER A
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
Linder’s hypothesis provides an explanation for A) increasing returns to scale. B) imperfect competition. C) intraindustry trade. D) All of the above. ANSWER C
Date: September 10th, 2020
Under the monetary approach to the exchange rate A) an interest rate decrease is associated with higher expected inflation and a currency that will be weaker on all future dates. B) an interest rate increase is associated with higher expected deflation and a currency that will be weaker on all future dates. C) an interest […]
Date: September 10th, 2020
The Shipbreakers of Alang arouse the ire of Greenpeace because of A) India’s non-repentant nuclear stance. B) India’s import-competing industrialization policies. C) the difficulty of avoiding ship accidents between Greenpeace’s sailboat and the reconstructed Container ships of Alang. D) the large amount of pollution associated with the operations at Alang. E) their competition with capital-intensive […]
Date: September 10th, 2020
The Lost Decade refers to the years between approximately A) 1975 and 1985. B) 1980 and 1990. C) 1987 and 1997. D) 1972 and 1980. E) 1960 and 1970. ANSWER B
Date: September 10th, 2020
