This refers to an increase in government spending that produces a reduction in private spending A) crowding out. B) investment disappointment. C) social loss. D) deadweight loss. ANSWER A
Date: September 10th, 2020
Direct investment and security purchases are included in A) current account items. B) capital account items. C) basic balance account items. D) unilateral transfers. ANSWER B
Date: September 10th, 2020
Labor standards in trade are typically opposed by most developing countries who believe that they will be used A) to further neo-imperialist colonial exploitation. B) to charge these countries with crimes against child-labor standards at the Hague. C) as a protectionist tool by import-competing producers in industrial countries. D) as a means of spreading U.S. […]
Date: September 10th, 2020
Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged in A) intra-industry trade. B) price competition. C) inter-industry trade. D) Heckscher-Ohlinean trade. E) immiserizing trade. ANSWER A
Date: September 10th, 2020
An examination of the Ricardian model of comparative advantage yields the clear result that trade is (potentially) beneficial for each of the two trading partners since it allows for an expanded consumption choice for each. However, for the world as a whole the expansion of production of one product must involve a decrease in the […]
Date: September 10th, 2020
Why is it important to understand fixed exchange rates in the modern global economy? What will be an ideal response? ANSWER Fixed rates continue to be important for four reasons: 1. Managed floating: Central banks intervene in foreign exchange markets. 2. Regional currency arrangements: Some countries peg their currency to another currency. 3. Developing […]
Date: September 10th, 2020
Central banks often intervene in currency markets. This activity is called A) managed floating. B) fixing exchange rates. C) currency warfare. D) super-pegging. E) flexible floating. ANSWER A
Date: September 10th, 2020
Intraindustry trade relies on A) economies of scale. B) the product cycle. C) differences in factor endowments. D) government industrial policies. E) monopoly pricing. ANSWER A
Date: September 10th, 2020
To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the A) international commodity agreements program. B) multilateral contract program. C) generalized system of preferences program. D) export led growth program. E) import substitution policy. ANSWER C
Date: September 10th, 2020
Technology transfer comes only from nations importing new capital goods in the current account. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
