Intraindustry trade is characterized by what two features? What will be an ideal response? ANSWER Economies of scale and differentiated products
Date: September 10th, 2020
Suppose the United States’ production possibility frontier was flatter to the widget axis, whereas Germany’s was flatter to the butter axis. We now learn that the German mark sharply depreciates against the U.S. dollar. We now know that A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) […]
Date: September 10th, 2020
A system of managed floating exchange rates is A) a system in which governments may attempt to moderate exchange rate movements without keeping exchange rates rigidly fixed. B) a system in which governments use flexible exchange rates. C) a system in which governments are forbidden from attempt to moderate exchange rate movements without keeping exchange […]
Date: September 10th, 2020
If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at ? Please explain. What will be an ideal response? ANSWER No, the rise in output leads to an excess demand for money. If the central bank […]
Date: September 10th, 2020
If the United States’ production possibility frontier was flatter to the widget axis, whereas Germany’s was flatter to the butter axis, we know that A) the United States has no comparative advantage B) Germany has a comparative advantage in butter. C) the U.S. has a comparative advantage in butter. D) Germany has comparative advantages in […]
Date: September 10th, 2020
The first phase of a typical cycle of economic populism is usually A) hyperinflation. B) rising growth and rising wages. C) falling growth and falling wages. D) rising unemployment. E) severe disinflation. ANSWER B
Date: September 10th, 2020
The goal of international economic policy cooperation is to allow for greater flexibility in exchange rates. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Low wages and poor working conditions in many U.S. trade partners A) prove that the gains-from-trade arguments of the Ricardian model are false. B) may be a fact of life, but economists don’t care. C) are facts emphasized by U.S. labor in its contract negotiations. D) prove that the gains-from-trade arguments of the Ricardian model […]
Date: September 10th, 2020
The development of countries like South Korea has been supported by all of the following EXCEPT A) high domestic interest rates. B) high domestic saving rates. C) large endowments of human capital. D) high levels of labor productivity. E) reduced government regulation. ANSWER A
Date: September 10th, 2020
Which of the following is NOT a major actor in the foreign exchange market? A) corporations B) central banks C) commercial banks D) non-bank financial institutions E) tourists ANSWER E
Date: September 10th, 2020
