Large current account deficits imply large financial account surpluses. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
A corporation is considered a multinational ________ if ________. A) parent; it owns more than 10% of a foreign firm B) parent; more than 10% of its stock is held by a foreign company C) child; more than 10% of its stock is held by a foreign company D) child; more than 50% of its […]
Date: September 10th, 2020
Under fixed rates, which one of the following statements is the MOST accurate? A) Monetary policy can affect only output. B) Monetary policy can affect only employment. C) Monetary policy can affect only international reserves. D) Monetary policy can not affect international reserves. E) Monetary policy can only affect money supply. ANSWER C
Date: September 10th, 2020
Which of the following is a FALSE statement concerning purchasing power parity? A) Purchasing power parity states that dollars will tend to exchange for pounds at a rate that maintains a constant purchasing power of a given quantity of a currency. B) Over the long term, a Big Mac in New York will tend to […]
Date: September 10th, 2020
Most trade between Mexico and the United States is intrafirm. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
What is the Fisher Effect? Provide an example. What will be an ideal response? ANSWER All else equal, a rise in a country’s expected inflation rate will eventually cause an equal rise in the interest rate that deposits of its currency offer. Similarly, a fall in the expected inflation rate will eventually cause a […]
Date: September 10th, 2020
The external shock that hit Mexico and other Latin American countries in the early 1980s that caused the Lost Decade was a collapse in world oil prices. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The two-country, multi-product model differs from the two-country, two-product model in that, in the former A) the relative wage ratio will determine the pattern of trade ( which good is exported by which country. B) which country will export which product is determined entirely by labor productivity data. C) full specialization is likely to hold […]
Date: September 10th, 2020
The U.S. is the world’s largest creditor. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
What is a pollution haven? What will be an ideal response? ANSWER A pollution haven is a country with relatively lax environmental standards or enforcement. In effect, countries with strict standards export activities that pose high environmental risks to countries that are willing to accept the risks.
Date: September 10th, 2020
