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
The invocation of beggar-thy-neighbor arguments with respect to industrial policies A) strengthens the argument for subsidies. B) makes sense if the international Keynesian multipliers exceed unity. C) applies only to rich countries most of whose trade partners are very poor countries. D) weakens the argument for subsidies. E) does not apply to rich countries who […]
Date: September 10th, 2020
Assume that labor is the only factor of production and that wages in the United States equal $20 per hour while wages in Japan are $10 per hour. Production costs would be lower in the United States as compared to Japan if A) U.S. labor productivity equaled 40 units per hour and Japan’s 15 units […]
Date: September 10th, 2020
France is capital abundant and Italy is labor abundant. Shoes are labor intensive and wheat is capital intensive. Draw diagrams to illustrate the pre- and post-trade equilibria for each of the two countries including the production points, the consumption points, the international price, and the volumes of exports and imports for each. Be sure to […]
Date: September 10th, 2020
________ is the largest international debtor in the world. A) Brazil B) Mexico C) Italy D) The United States ANSWER D
Date: September 10th, 2020
Intraindustry trade refers to A) international trade of products made within the same industry. B) international trade of products made across different industries. C) trade that occurs as a result of comparative advantage. D) the exchange of non-similar items. E) trade that occurs mostly within developing countries. ANSWER A
Date: September 10th, 2020
