If the market for products produced by firms in a monopolistically competitive industry becomes ________, then there will be ________ firms and each firm will produce ________ output and charge a ________ price. A) smaller; fewer; less; higher B) smaller; more; less; higher C) smaller; more; less; lower D) smaller; fewer; less; lower E) smaller; […]
The growth successes of the high performance Asian economies A) supports the belief that economic development requires import substitution policies. B) rejects the belief that export-oriented industrialization is likely to promote economic development. C) rejects the belief that economic development requires import substitution policies. D) suggests that free trade policies are required for successful economic […]
In today’s world markets, poor developing countries tend to rely primarily on exports of A) agricultural products. B) primary products. C) mineral products. D) manufactured products. E) high-tech products. ANSWER D
Economies of scale are an important determinant of comparative advantage based trade. Indicate whether the statement is true or false ANSWER FALSE
If a production possibilities frontier is bowed out (concave to the origin), then production occurs under conditions of A) constant opportunity costs. B) increasing opportunity costs. C) decreasing opportunity costs. D) infinite opportunity costs. E) uncertain opportunity costs. ANSWER B
A forward exchange market contract obligates the owner to make a trade at a specified exchange rate a fixed number of days in the future. Indicate whether the statement is true or false ANSWER TRUE
Nondeliverable forward exchange markets in centers such as Hong Kong and Singapore help to circumvent which problem? A) loss of goods shipped from Hong Kong and Singapore B) inconvertible currencies cannot be traded in foreign markets C) lag between the spot exchange date and the value date D) high travel costs from Asia to “traditional” […]
The BP curve is upward sloping if assets are perfectly substitutable. Indicate whether the statement is true or false ANSWER FALSE
A balance sheet for the central bank of Pecunia is shown below: Central Bank Balance Sheet Assets Liabilities Foreign assets $1,000 Deposits held by private banks $500 Domestic assets $1,500 Currency in circulation $2,000 Please write the new balance sheet if the bank sells $100 worth of foreign bonds for domestic currency. ANSWER Central […]
Which of the following has not been suggested as a reconciliation of Leontief’s findings? A) international differences in tastes B) U.S. tariff structure C) failure to take into account natural resources D) temporary data problems immediately after World War II ANSWER D
