Which of the following is an example of intraindustry trade? A) Trading peanut oil for tractors B) Trading crude oil for automobiles C) Trading Nokia smartphone for Apple iPhones D) Trading jeans for cotton ANSWER C
Date: September 10th, 2020
Covered interest arbitrage involves both A) the purchase of a foreign asset and a forward contract in the market for foreign exchange. B) the purchase of a domestic asset and a spot contract in the market for foreign exchange. C) the sale of a foreign asset and the purchase of a forward contract in the […]
Date: September 10th, 2020
In basic terms, the current account is equal to A) imports plus exports. B) savings minus consumption. C) exports minus imports. D) savings plus exports. ANSWER C
Date: September 10th, 2020
Indirectly, overvalued exchange rates in Latin America caused A) a capital shortage in agriculture. B) a capital shortage in industry. C) a capital abundance in agriculture. D) a growth in incomes in rural areas. E) an increase in competitive pressures faced by industry. ANSWER A
Date: September 10th, 2020
Leontief found that A) U.S. exports are capital intensive relative to U.S. imports. B) U.S. imports are labor intensive relative to U.S. exports. C) U.S. exports are neither labor nor capital intensive. D) None of the above. ANSWER B
Date: September 10th, 2020
Internal balance can be graphically represented as the intersection of the IS curve with the LM curve. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Which of the following statements is the MOST accurate? In general A) the monetary approach to the exchange rate is a long run theory. B) the monetary approach to the exchange rate is a short run theory. C) the monetary approach to the exchange rate is both a short and long run theory. D) the […]
Date: September 10th, 2020
MacDougall’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 C
Date: September 10th, 2020
In order to protect against foreign exchange risk, firms can use A) the spot market for foreign exchange. B) interest rate arbitrage. C) purchasing power parity. D) the forward market for foreign exchange. E) the J-curve. ANSWER D
Date: September 10th, 2020
Which of the following would cause the IS curve to shift to the left? A) an increase in government expenditures B) a decrease in the money supply C) an increase in domestic investment D) a decrease in taxes ANSWER B
Date: September 10th, 2020
