According to Linder, the gains from international trade come about because consumers are exposed to A) a greater variety of goods. B) increasing returns to scale. C) imperfect competition. D) None of the above. ANSWER A
Date: September 10th, 2020
The Shipbreakers of Alang represent a perfect example of how a developing country can apply the principles of the Heckscher-Ohlin model, since A) shipbreaking is generally considered to be a capital-intensive operation and India, being a large country has much capital. B) shipbreaking is a labor-intensive operation in India, and India has many workers since […]
Date: September 10th, 2020
What policies would you recommend to the U.S. government to lower the balance of trade deficit and decrease net capital inflows? What will be an ideal response? ANSWER Lower the fiscal deficit.
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
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
