A current account deficit implies that A) the country is a net lender with the rest of the world. B) the country is running a net capital account surplus. C) foreign investment in domestic securities is at very low levels. D) All of the above. ANSWER B
Date: September 10th, 2020
The Ricardian model of comparative advantage lends support to the argument that A) trade tends to worsen the conditions of unskilled labor in rich countries. B) trade tends to worsen the conditions of owners of capital in rich countries. C) trade tends to worsen the conditions of workers in poor countries. D) trade tends to […]
Date: September 10th, 2020
The following is an example of Radio Shack hedging its foreign currency risk A) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange deal to buy yen. B) needing to pay 9,000 yen per radio to its suppliers in a month, Radio Shack makes a forward-exchange […]
Date: September 10th, 2020
Intraindustry trade can lead to lower prices and job creation in both the exporting and the importing nation. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
When Jeneva went to Costa Rica in July 2008, a U.S. dollar was worth 550 colones. If today a U.S. dollar is worth 650 colones, it means that the U.S. dollar has depreciated against the colone. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
What benefits did an overvalued currency offer a domestic economy in the ISI period? Which sectors were typically harmed by overvalued currencies? What will be an ideal response? ANSWER Overvalued exchange rates made it easier for targeted industries to buy imported capital goods and kept urban workers more allied with political leaders because foreign […]
Date: September 10th, 2020
Tests, using Leontief’s methodology, to explain trade patterns of other countries A) show that the Leontief Paradox holds only for the United States. B) show that paradoxical results obtain for some countries but not for others. C) show that the Leontief paradox holds in every case. D) have never been performed. ANSWER B
Date: September 10th, 2020
Most developing countries oppose including labor standards in trade agreements because A) they believe this would involve a loss of their national sovereignty. B) they believe this would limit their ability to export to rich markets. C) they believe this would create an uneven playing field. D) multinational corporations control them. E) they do not […]
Date: September 10th, 2020
Security purchases by citizens of the United States on foreigners markets is A) a credit item in the current account. B) a debit item in the capital account. C) a credit item in the capital account. D) a debit item in the current account. ANSWER B
Date: September 10th, 2020
Who among the following list of people is an early 20th century economist from Yale University who wrote the book The Theory of Interest? A) Gustav Cassel B) Irving Fisher C) David Ricardo D) Paul Krugman E) Israel Kirzner ANSWER B
Date: September 10th, 2020
