A current account surplus implies that A) the country is a net lender with the rest of the world. B) the country is running a net capital account surplus. C) foreign investment in domestic securities is at very low levels. D) All of the above. ANSWER A
Date: September 10th, 2020
If a very small country trades with a very large country according to the Ricardian model, then A) the small country will suffer a decrease in economic welfare. B) the large country will suffer a decrease in economic welfare. C) the small country only will enjoy gains from trade. D) the large country will enjoy […]
Date: September 10th, 2020
If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region, what type of trade does this represent? What will be an ideal response? ANSWER Intrafirm
Date: September 10th, 2020
Total debt is more important in figuring out the ability of a country to service its debt than are debt to GDP and debt to export ratios. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Describe the criteria for membership in the European Union. Given the criteria, what are some of the major challenges with expanding the EU eastward? What are the potential problems of Turkey joining the EU? What will be an ideal response? ANSWER The criteria for membership include that the nation must be a stable, functioning […]
Date: September 10th, 2020
Spencer and Brander’s model highlights the existence of A) aircraft industries. B) excess returns present in highly competitive markets. C) excess returns, or rents, available in non-competitive markets. D) the futility of government bureaucrats’ attempts to build an airplane. E) natural advantages in foreign technology firms. ANSWER C
Date: September 10th, 2020
According the Stolper-Samuelson theorem, the scarce factor in any given country should oppose international trade by that country. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
International trade based on external scale economies in both countries is likely to be carried out by A) a relatively large number of price competing firms. B) a relatively small number of price competing firms. C) a relatively small number of imperfect competitors. D) monopolists in each country. E) a large number of oligopolists in […]
Date: September 10th, 2020
In the Ricardian model, if a country’s trade is restricted, this will cause all EXCEPT which? A) limited specialization and the division of labor B) reduced volume of trade and reduced gains from trade C) nations to produce inside their production possibilities curves D) a country to produce some of the product of its comparative […]
Date: September 10th, 2020
The world of flexible exchange rates and perfect capital mobility is often called the A) Keynesian model. B) Mundell-Fleming model. C) Monetarist model. D) Melvin model. ANSWER B
Date: September 10th, 2020
