Tests of the Heckscher-Ohlin model by Bowen, Leamer, and Sveikauskas and by Maskus continue to A) provide strong support for the theory. B) provide weak support for the theory. C) provide evidence against the theory. ANSWER C
Date: September 10th, 2020
What is the primary reason exchange rates were overvalued under ISI? What will be an ideal response? ANSWER Because fixed exchange rates were used and inflation was higher than that of trading partners
Date: September 10th, 2020
With perfect asset substitutability and capital mobility the domestic interest rate is equal to the foreign rate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of the following is NOT an example of a financial derivative? A) forwards B) bonds C) swaps D) futures E) options ANSWER B
Date: September 10th, 2020
In the mid 1980s, the massive current account deficits were related to massive U.S. government budget deficits. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Taiwan and South Korea are examples of developing nations that have recently pursued these industrialization policies A) import substitution. B) export promotion. C) commercial dumping. D) multilateral contract. E) trade embargoes. ANSWER B
Date: September 10th, 2020
In the model of monopolistic competition, compared to a firm with a higher marginal cost, a firm with a lower marginal cost will set a ________ price, produce ________ output, and earn ________ profits. A) lower; more; more B) higher; more; more C) lower; less; less D) higher; less; less E) higher; less; more […]
Date: September 10th, 2020
A problem with Leontief’s methodology is that A) he had no information on U.S. and foreign factor endowments. B) he did not use information on foreign factor intensities. C) he ignored the roles of other factors of production such as natural resources. D) All of the above are problems. ANSWER D
Date: September 10th, 2020
When Japan’s MITI (Ministry of International Trade and Industry) focused resources on the semiconductor industry, and in particular on Random Access Memory (RAM), it was viewed as a typically successful Japanese foray into a new dynamic strategic sector. The results, as viewed by the late 1990s A) justified this view. B) led to similar structuring […]
Date: September 10th, 2020
Monetary policy is most effective at home when exchange rates are flexible. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
