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
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 […]
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
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
In the model of monopolistic competition, if firms have ________ average cost curves, then opening trade will ________ the total number of firms and ________ the average price. A) downward sloping; decrease; decrease B) downward sloping; decrease; increase C) downward sloping; increase; decrease D) upward sloping; decrease; increase E) upward sloping; increase; decrease ANSWER […]
Credit entries on the Balance of Payments are the entries that would A) mean a loss of foreign exchange. B) bring foreign exchange into the country. C) indicate a surplus exists. D) exist at the bottom line after all accounts are totaled. ANSWER B
If two countries have identical production possibility frontiers, then trade between them is likely to be beneficial if A) their supply curves are identical. B) their cost functions are identical. C) their demand conditions are identical. D) their incomes are identical. E) their demand functions differ. ANSWER E
Fiscal policy is most effective when exchange rates are fixed. Indicate whether the statement is true or false ANSWER TRUE
Intraindustry trade tends to be more controversial than interindustry trade. Indicate whether the statement is true or false ANSWER FALSE
If countries have similar factors of production and similar productivities, most of their trade is likely to be intraindustry. Indicate whether the statement is true or false ANSWER TRUE
