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 […]
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
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 […]
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 […]
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
In the model of monopolistic competition, trade costs between countries will cause domestic and foreign markets to have ________ prices, ________ quantities sold, and ________ profit levels. A) different; different; different B) identical; different; different C) different; different; identical D) identical; different; identical E) identical; identical; different ANSWER A
The Country of Rhozundia is blessed with rich copper deposits. The cost of copper produced (relative to the cost of widgets produced) is therefore very low. From this information we know that A) Rhozundia has a comparative advantage in copper. B) Rhozundia should import copper and export widgets. C) Rhozundia should export both widgets and […]
Exxon Mobil wants to pay 160,000 to a German supplier. They get an exchange rate quotation from its own commercial bank and instructs it to debit their dollar account and pay 160,000 to the supplier’s German account. If the exchange rate quoted is $1.2 per euro, how much is debited to Exxon Mobil’s account? A) […]
International free trade always hurts the nations that run deficits, and benefits the nations that run surpluses. Indicate whether the statement is true or false ANSWER FALSE
It is possible for every nation to have BOP surpluses. Indicate whether the statement is true or false ANSWER FALSE
