Given the information in the table above. What is the opportunity cost of Cloth in terms of Widgets in Foreign? What will be an ideal response? ANSWER One half a widget.
Date: September 10th, 2020
In 2010, about A) 20 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. B) 10 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. C) 30 percent of foreign exchange transactions involved exchanges of foreign currencies for U.S. dollars. D) 40 percent of foreign exchange transactions […]
Date: September 10th, 2020
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
In order for the condition E$/HK$ = PUS/PHK to hold, what assumptions does the principle of purchasing power parity make? A) Only that there are no transportation costs and restrictions on trade. B) Only that the markets are perfectly competitive, i.e., P = MC. C) The factors of production are identical between countries. D) No […]
Date: September 10th, 2020
Proponents of ISI assumed that governments A) were capable of identifying and correcting market failures. B) were capable of identifying and correcting the excesses of economic populists. C) should enact orthodox stabilization plans. D) could control the terms of trade. E) Both A and D. ANSWER A
Date: September 10th, 2020
Which of the following does NOT indicate intraindustry trade? A) Trading Jeeps for Toyotas B) Trading Boeing airplanes for Airbus airplanes C) Trading Bush beer for Heineken beer D) Trading Japanese-made films for Hollywood-made films E) Trading oil for trucks ANSWER E
Date: September 10th, 2020
