A point to the left of the BP curve would represent A) a balance of payments deficit. B) a balance of payments surplus. C) internal disequilibrium. D) Both A and C. ANSWER B
Date: September 10th, 2020
Describe the product cycle, including addressing the various inputs that are required over time and the resulting production location decisions. What will be an ideal response? ANSWER Manufactured products go through a product cycle in which inputs change over time. The early phase is characterized by experimentation in both the product and the manufacturing […]
Date: September 10th, 2020
In the Brander-Spencer model the subsidy raises profits by more than the subsidy because of A) the “multiplier” effect of government expenditures. B) the military-industrial complex. C) the forward and backward linkage effects of certain industries. D) the deterrent effect of the subsidy on foreign competition. E) the economies of scale once the company enters […]
Date: September 10th, 2020
What does the “brain drain” refer to and why is it a problem for developing countries? What will be an ideal response? ANSWER The brain drain refers to the migration of skilled workers from one country to another. It is a problem for developing countries because skilled workers are more likely to migrate from […]
Date: September 10th, 2020
Country A is labor abundant relative to country B if it has a larger labor force than B’s. Indicate whether the statement is true or false ANSWER FALSE Explanation: The ratio of labor to capital determines abundance.
Date: September 10th, 2020
Describe the history and consequent deepening as the European Union developed. Which treaties created which level of economic integration? Do countries have the ability to participate in some levels of integration and not others? Give specific examples. ANSWER The Treaty of Rome created the basics for a free trade area as well as a […]
Date: September 10th, 2020
The current account includes A) the value of trade in merchandise. B) services. C) unilateral transfers. D) All of the above. ANSWER D
Date: September 10th, 2020
The LM curve represents combinations of income and interest rate which A) clear the goods market. B) achieve the external equilibrium. C) clear the money market. D) achieve internal equilibrium. ANSWER C
Date: September 10th, 2020
An increase in the money supply would A) shift the LM curve to the left. B) shift the IS curve to the right. C) shift the IS curve to the left. D) shift the LM curve to the right. ANSWER D
Date: September 10th, 2020
What is immizerizing growth? Describe how it could happen and give at least one cited historical example. What will be an ideal response? ANSWER Immizerizing growth represents economic growth that results in a reduction in national welfare. When a large country expands its productive capacity of an exported good, the biased economic growth will […]
Date: September 10th, 2020
