Refer to the above table. Suppose Airbus is set to produce the aircraft before Boeing. Which company will enter the market? What will be an ideal response? ANSWER Airbus will produce and Boeing will not.
Date: September 10th, 2020
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 […]
Date: September 10th, 2020
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
Date: September 10th, 2020
Which of the following type of funds cater to wealthy individuals, are not bound by government regulations, and are actively traded in foreign exchange markets? A) pension funds B) mutual funds C) hedge funds D) exchange funds ANSWER C
Date: September 10th, 2020
An input-output table A) details the flows of goods and services between various sectors of the economy. B) shows purchases by certain industries from other industries. C) shows sales by certain industries to other industries. D) All of the above. ANSWER D
Date: September 10th, 2020
Which of the following would cause the LM curve to shift to the right? A) increased money supply B) a larger U.S. capital account deficit C) a depreciation of the dollar D) lower level of U.S. income ANSWER D
Date: September 10th, 2020
The liabilities side of a central bank’s accounts consists of A) deposits held by private banks. B) currency in circulation. C) deposits held by private banks and currency in circulation. D) deposits held by foreign banks, domestic assets, and currency in circulation. E) foreign assets and domestic assets. ANSWER C
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
