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
ISI policies were brought to an end primarily by A) their inability to solve the crises of the 1980s. B) authoritarian governments interested in total control over the economy. C) populist politicians. D) the growing perception that they were creating long-term economic inefficiencies. E) Both A and D. ANSWER E
Date: September 10th, 2020
If the production possibilities frontier of one trade partner (“Country A”) is bowed out (concave to the origin), then increased specialization in production by that country will A) increase the economic welfare of both countries. B) increase the economic welfare of only Country A. C) decrease the economic welfare of Country A. D) decrease the […]
Date: September 10th, 2020
Leontief’s results can be interpreted as A) evidence against the classical model. B) evidence against the Heckscher-Ohlin model. C) support for the classical model. D) support for the Heckscher-Ohlin model. ANSWER B
Date: September 10th, 2020
In the second half of the 1990s a rapidly growing movement focused on the harm caused by international trade to A) land owners in poor countries. B) capital owners in rich industrialized countries. C) land owners in rich industrialized countries. D) production workers in both rich and poor countries. E) terms of trade in developing […]
Date: September 10th, 2020
The payment of a dividend by a foreign company to an American stockholder represents A) a debit in the U.S. capital account. B) a credit in the U.S. current account. C) a credit in the U.S. official reserve account. D) a debit in the U.S. current account. ANSWER B
Date: September 10th, 2020
Which of the following statements is the MOST accurate? In general, under the monetary approach to the exchange rate A) the interest rate is not independent of the money supply growth rate in the short run. B) the interest rate is independent of the money supply growth rate in the long run. C) the interest […]
Date: September 10th, 2020
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; […]
Date: September 10th, 2020
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 […]
Date: September 10th, 2020
Refer to the above table. Suppose the U.S. government (but not Europe) offers a $10 million subsidy? What will be an ideal response? ANSWER In this case Airbus would decide not to enter the market since it knows Boeing will, and that therefore its own production will entail a loss of $5 million.
Date: September 10th, 2020
