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
Date: September 10th, 2020
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
Date: September 10th, 2020
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” […]
Date: September 10th, 2020
The BP curve is upward sloping if assets are perfectly substitutable. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
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 […]
Date: September 10th, 2020
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
Date: September 10th, 2020
Refer to the above table. How could the U.S. government justify its decision to offer a subsidy to a profitable and successful business? What will be an ideal response? ANSWER It could point out that this $10 million pump-priming expenditure results in a profit of $110 million. If Boeing paid a marginal income tax […]
Date: September 10th, 2020
In an industry where firms experience internal scale economies, the long-run cost of production will depend on A) the size of the market. B) the size of the labor force. C) whether the country engages in intra-industry trade. D) individual firms’ fixed costs. E) whether the country engages in inter-industry trade. ANSWER A
Date: September 10th, 2020
The spot rate is the rate at which foreign currencies will be exchanged a specified number of days in the future. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation? A) export promotion B) import substitution C) international commodity agreements D) Infant Industry promotion E) intra-industry trade practice ANSWER A
Date: September 10th, 2020
