Economics

Trade without serious income distribution effects is most likely to ha

Trade without serious income distribution effects is most likely to happen A) in sophisticated manufactures trade between rich countries. B) in simple manufactures trade between developing countries. C) in sophisticated manufactures trade between rich and poor countries. D) in agricultural trade between rich countries. E) in labor-intensive industries like clothing.   ANSWER A

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Date: September 10th, 2020

When an individual or firm in the United States requests that a bank s

When an individual or firm in the United States requests that a bank sell foreign exchange, the bank will probably A) call a foreign bank and arrange a purchase. B) call the central bank and arrange a purchase. C) call another bank customer with foreign exchange holdings. D) call another domestic bank and arrange a […]

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Date: September 10th, 2020

Internal economies of scale means that A) firms are experiencing lowe

Internal economies of scale means that A) firms are experiencing lower average production costs due to a geographical concentration of firms in their industry that make it cheaper and easier to hire highly specialized workers and inputs. B) firms will have lower profits after international trade begins, because costs will be higher than when they […]

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Date: September 10th, 2020

The Ricardian proposition that international trade will benefit any co

The Ricardian proposition that international trade will benefit any country (“gains from trade”) as long as the world terms of trade do not equal its autarkic relative prices is a straightforward and powerful concept. Nevertheless, it is impossible to demonstrate empirically. Why?   ANSWER This is because there is no way of knowing exactly what […]

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Date: September 10th, 2020

Overvalued exchange rates were a persistent problem under ISI policies

Overvalued exchange rates were a persistent problem under ISI policies. In part, this was a deliberate policy in order to A) increase imports. B) discourage exports. C) help targeted industries sell their exports. D) help targeted industries buy imports. E) increase the competition for targeted industries.   ANSWER D

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Date: September 10th, 2020