The Single European Act was expected to create economic benefits by reducing the costs and risks of currency market transactions. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Which of the following could explain why the terms of trade of developing countries might deteriorate over time? A) Developing country exports consist mainly of manufactured goods. B) Developing country exports consist mainly of primary products. C) Commodity export prices are determined in highly competitive markets. D) Commodity export prices are solely determined by developing […]
Date: September 10th, 2020
The infant industry argument is that A) comparative advantage is irrelevant to economic growth. B) developing countries have a comparative advantage in agricultural goods. C) developing countries have a comparative advantage in manufacturing. D) developing countries have a potential comparative advantage in manufacturing. E) developing countries have no chance to compete with industrialized countries. […]
Date: September 10th, 2020
Which of the following is a critical element of the Heckscher-Ohlin model? A) That different goods display different factor intensities in their production. B) That some countries have no comparative advantage in anything. C) That trade may not be beneficial. D) All of the above. ANSWER A
Date: September 10th, 2020
Which of the following theorems predicts that trade benefits the abundant factors of a country and harms the scarce factors? A) The Stolper-Samuelson theorem. B) The Rybczynski theorem. C) The Heckscher-Ohlin theorem. D) None of the above. ANSWER A
Date: September 10th, 2020
The primary interest of firms engaging in offshoring is to find lower wages and to decrease production costs. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
How do recent current account deficits compare to GNP and to past ratios? What will be an ideal response? ANSWER It is over 6 percent of GNP, much larger than it has been in the past, and the percentage has grown sharply over the last few years.
Date: September 10th, 2020
The way in which a country grows affects the pattern of trade of a country. True or false. Discuss. What will be an ideal response? ANSWER Growth causes a country’s PPF to shift out. This has implications for both production and consumption. Since trade is the difference between production and consumption, it will tend […]
Date: September 10th, 2020
Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers? A) international commodity agreement B) export promotion C) multilateral contract D) import substitution E) export subsidies ANSWER D
Date: September 10th, 2020
An imperfectly competitive firm has the following demand curve: Q = 100 – 2P. What is marginal revenue equal to when P = 30? What will be an ideal response? ANSWER Q = 40, so MR = 30 – (40/2 ) = 10.
Date: September 10th, 2020
