According to Ricardo, a country will have a comparative advantage in the product in which its A) labor productivity is relatively low. B) labor productivity is relatively high. C) labor mobility is relatively low. D) labor mobility is relatively high. E) labor is outsourced to neighboring countries. ANSWER B
Date: September 10th, 2020
Import substitution policies make use of A) tariffs that discourage goods from entering a country. B) quotas applied to goods that are shipped abroad. C) production subsidies granted to industries with comparative advantage. D) tax breaks granted to industries with comparative advantage. E) production facilities provided by industrialized countries. ANSWER A
Date: September 10th, 2020
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 […]
Date: September 10th, 2020
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 […]
Date: September 10th, 2020
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) […]
Date: September 10th, 2020
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
Date: September 10th, 2020
Even if some people are hurt by international trade, the HO model predicts that free international trade improves the standard of living for the country as a whole. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Complete crowding out occurs when A) monetary policy has no effect on income. B) fiscal policy has no effect on income. C) monetary policy has no effect on interest rates. D) fiscal policy has no effect on interest rates. ANSWER B
Date: September 10th, 2020
Most economists attribute the growing income inequality in the United States to A) trade. B) macroeconomic policies. C) technological change. D) changing values. E) taxes. ANSWER C
Date: September 10th, 2020
An example of odious debt would be debts on the part of a nation that were incurred by a dictator for the well being of his family. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
