Which of the following is FALSE about the Highly Indebted Poor Countries initiative? A) Most of the countries included are in sub-Saharan Africa. B) Countries qualify for debt relief partly based on their level of poverty. C) Countries do not have to have established a past track record of economic reform in order to qualify […]
The European Union membership criteria includes all of the following EXCEPT A) the country must participate in free trade with all of its goods and services. B) the country must follow market-based economics. C) the country must formally adopt the EU-wide rules such as technical standards, environmental inspections, banking supervision, etc. D) the country must […]
The assumption that the two goods are made using different factor intensities raises the likelihood of incomplete specialization after trade begins. Indicate whether the statement is true or false ANSWER TRUE Explanation: It introduces increasing opportunity costs into the model.
In the BOP, travel and tourism are included in A) unilateral transfers. B) the capital account. C) the merchandise account. D) the services account. ANSWER D
Under oligopoly, firms’ pricing policies are ________ and, under monopolistic competition, they are ________. A) interdependent; independent B) independent; interdependent C) cooperative; uncooperative D) uncooperative; cooperative E) profit maximizing; revenue maximizing ANSWER A
Refer to above figure. If manufacturing labor were to increase to OmL2, how much value would the economy as a whole gain? What will be an ideal response? ANSWER The triangle ABC.
What does research thus far suggest about job loss and offshoring? What will be an ideal response? ANSWER That outsourcing can be complementary and not just a substitute for domestic labor
As a result of trade, specialization in the Ricardian model tends to be A) complete with constant costs and with increasing costs. B) complete with constant costs and incomplete with increasing costs. C) incomplete with constant costs and complete with increasing costs. D) incomplete with constant costs and incomplete with increasing costs. E) dependent on […]
Which of the following is NOT one of the major problems with expanding the EU? A) Expansion has become a more difficult task because of the unwillingness of the eastern and central European countries to change. B) The programs that target EU expenditures could be stretched thin by the addition of countries with much lower […]
As interest rates rise, other things equal, A) investment decreases. B) money demand decreases. C) capital inflows increase. D) All of the above. ANSWER D
