The argument that strategic planning is not likely to be practical due to insufficient information means that A) because of trade secrets, the government does not know true cost relationships in any given industry. B) if the government had all the relevant information in a given industry then it could decide whether a subsidy would […]
What challenges does the European Union face in the short, medium, and long run? What will be an ideal response? ANSWER In the short to medium run, the EU must continue to create convergence in income and living standards between its poorest and most well off members. In the medium run, the EU must […]
The reason Airbus succeeded in the Brander Spencer example is that A) Boeing made the first move in this strategic game. B) Europeans tend to be better strategists than corn-fed Americans. C) the Airbus actually was a better plane than the Boeing 747. D) U.S. laws actually prohibit U.S. exporters from bribing foreign officials. E) […]
The Heckscher-Ohlin model is an alternative to the classical theory of international trade that focuses on the factors of production that countries possess. Indicate whether the statement is true or false ANSWER TRUE
With floating exchange rates, BOP equilibrium is restored by A) trade restrictions. B) earnings from foreign investments. C) exchange rate changes. D) All of the above. ANSWER C
If the world terms of trade equal those of country H, then A) country H but not country F will gain from trade. B) country H and country F will both gain from trade. C) neither country H nor F will gain from trade. D) only the country whose government subsidizes its exports will gain. […]
A monopoly firm engaged in international trade will A) equate marginal costs with marginal revenues in both domestic and foreign markets. B) equate average to local costs. C) equate marginal costs with foreign marginal revenues. D) equate marginal costs with the highest price the market will bear. E) equate marginal costs with the relative world […]
Between 1972 and 1999, the majority of loans to HIPC countries went to regimes considered “not free,” and between 1985 and 1995, to places that were considered “corrupt” by international organizations. Indicate whether the statement is true or false ANSWER TRUE
Brazil’s export record in 1999 illustrated the principle that A) a large country will tend to have few exports. B) a small country will tend to have a high export ratio. C) protectionist policies tend to discourage exports. D) export-promoting policies do not tend to work. E) import substitution policies helped the Brazilian economy. […]
According to your text, what is the major long-run issue facing the European Union? What will be an ideal response? ANSWER An aging population
