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 […]
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
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
Under PPP (and by the Fisher Effect), all else equal A) a rise in a country’s expected inflation rate will eventually cause a more-than proportional rise in the interest rate that deposits of its currency offer in order to accommodate for the higher inflation. B) a fall in a country’s expected inflation rate will eventually […]
The BP curve presents combinations of y and i that yield balance of trade equilibrium. Indicate whether the statement is true or false ANSWER FALSE
In 2003, the per-capita income in China was roughly ________ of that in the U.S. A) one hundredth B) one eighth C) one half D) the same as E) one twentieth ANSWER B
The United States became a net international debtor in 1985 for the first time since World War I. Indicate whether the statement is true or false ANSWER TRUE
By April 2010 A) only about 10 percent of foreign exchange trades were against euros. B) only about 24 percent of foreign exchange trades were against euros. C) only about 39 percent of foreign exchange trades were against euros. D) only about 42 percent of foreign exchange trades were against euros. E) only about 60 […]
In a two-country, two-product world, the statement “Germany enjoys a comparative advantage over France in autos relative to ships” is equivalent to A) France having a comparative advantage over Germany in ships. B) France having a comparative disadvantage compared to Germany in autos and ships. C) Germany having a comparative advantage over France in autos […]
In the model of monopolistic competition, compared to a firm with a lower marginal cost, a firm with a higher marginal cost will set a ________ price, produce ________ output, and earn ________ profits. A) higher; less; less B) lower; more; more C) higher; more; more D) lower; less; less E) higher; less; more […]
