Comparative advantage cannot account for a significant portion of world trade. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
When the WTO met in Seattle to initiate a further move towards free international trade, thousands of activists met A) in order to promote the WTO’s goals of “Trade-not Aid.” B) in order to laud the WTO policy orientation which would bust local monopolies and therefore help ordinary relatively poor consumers everywhere. C) in order […]
Date: September 10th, 2020
For countries such as the United States and the United Kingdom, it is important to have trade surpluses in order to service their external debts. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Which of the following transactions is a debit in the US current account? A) Export of merchandise B) Export of services C) Gifts to foreigners D) Foreign bond purchases ANSWER C
Date: September 10th, 2020
The disappointment with import-substitution policies is in part because A) of the rapid and continuous growth record of South American countries. B) many countries pursuing this strategy experienced stagnation in their growth. C) this policy is inconsistent with sophisticated economic growth models. D) this policy tended to create world-class industrial competitors. E) of the financial […]
Date: September 10th, 2020
Interindustry trade refers to A) international trade of products made within the same industry. B) domestic trade of products made within the same industry. C) international trade of products made across different industries. D) the exchange of similar items that are differentiated. E) None of the above. ANSWER C
Date: September 10th, 2020
The Heckscher-Ohlin model basically states that countries will specialize and trade those goods in which they have comparative advantage. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
If two countries engage in Free Trade following the principles of comparative advantage, then A) neither relative prices nor relative marginal costs (marginal rates of transformation-MRTs) in one country will equal those in the other country. B) both relative prices and MRTs will become equal in both countries. C) relative prices but not MRTs will […]
Date: September 10th, 2020
Latin America A) is significantly smaller than the NAFTA market in terms of population. B) has a smaller population, but a larger GDP than the NAFTA market. C) has a larger population than the NAFTA market. D) is similar in population to the NAFTA market. ANSWER C
Date: September 10th, 2020
Many economists argue that the sharp reduction in U.S. net exports in the mid 1980s was due to A) expansionary U.S. monetary policy. B) contractionary U.S. monetary policy. C) expansionary U.S. fiscal policy. D) contractionary U.S. fiscal policy. ANSWER C
Date: September 10th, 2020
