tenta 1 canvas ord Flashcards
“Trade in itself is generally harmful if there are large wage differences between countries.” What do our trade theories say about this statement?
This is true if the trade partner ignores child labor legislation.
This is generally false.
This is true if the trade partner uses prisoners as labor.
Trade theory has nothing to say about this.
This is generally true.
This is generally false.
Approximately what percentage of the world’s total production of goods and services is exported to other countries?
Choose one or no option:
100%
50%
30%
10%
90%
30%
Which of the following options is the BEST continuation of the following sentence? The Ricardian model of trade shows that
Choose one or no option:
trade between two countries can benefit one but harm the other.
trade between two countries always benefits the country with a larger workforce.
trade between two countries can benefit both countries regardless of which good each country exports.
trade between two countries can benefit both if each exports the good for which it has a comparative advantage.
all trade between two countries will always benefit both countries.
trade between two countries can benefit both if each exports the good for which it has a comparative advantage.
If the production possibility curve for two goods is a straight line, the opportunity cost is
Choose one or no option:
decreasing
infinite
[Cannot be determined]
increasing
constant
constant
In the specific-factor model as presented in the course, which of the following events would increase the quantity of labor used in textile production?
Choose one or no option:
An equal percentage increase in the price of food and textiles
An increase in the price of textiles relative to the price of food
An increase in the price of food relative to the price of textiles
An equal percentage decrease in the price of food and textiles
A decrease in the price of labor
(wages)
An increase in the price of textiles relative to the price of food
When there is equilibrium with international trade in the Heckscher-Ohlin model, the following will occur:
Choose one or no option:
the relative price of the capital-intensive good will be the same in the capital-rich country as in the capital-poor country.
the capital-rich country will charge less for the capital-intensive good than the price the capital-poor country pays for the capital-intensive good.
the capital-rich country will charge more for the capital-intensive good than the price the capital-poor country pays for the capital-intensive good.
workers in the capital-rich country will earn less than workers in the capital-poor country.
workers in the capital-rich country will earn more than workers in the capital-poor country.
the relative price of the capital-intensive good will be the same in the capital-rich country as in the capital-poor country.
The term “terms of trade” refers to:
Choose one or no option:
how much a country imports
the level of import tariffs between two trading countries
a country’s negotiated import price on the world market
how much a country exports
the price of a country’s export goods divided by the price of its import goods
the price of a country’s export goods divided by the price of its import goods
In the standard model with two goods, we know for certain that if an economy trading with the rest of the world produces at a point along its production possibility curve, then:
Choose one or no option:
all its capital is used in the production of one good
all its labor is used
all its labor is specialized in one good
all its capital is used, but not efficiently
both its export goods are produced in equal amounts
all its labor is used
If two countries both produce a certain good in a sector within the country and if there are internal economies of scale for this good, then, all else being equal, the country that initially has a ______ production of the good will ______ its production until it controls ______ of the market for this good.
Choose one or no option:
larger; increase; 50%
larger; increase; 100%
smaller; increase; 50%
larger; decrease; 0%
smaller; increase; 100%
larger; increase; 100%
In the model with monopolistic competition, an ______ in the number of firms in the sector will lead to ______ ______.
Choose one or no option:
decrease; the markup; fall
increase; the average price; fall
increase; the marginal cost; fall
increase; the average cost; fall
increase; the average price; rise
increase; the average price; fall
Which of the following options is the best description of specific tariffs?
Choose one or no option:
Specific tariffs are the same as import quotas.
Import taxes calculated as fixed charges per imported unit of the import good.
Import taxes mentioned in specific legal documents.
Import taxes calculated as a certain percentage of the import goods’ value.
Import taxes that vary depending on the country of origin of the import goods.
Import taxes calculated as fixed charges per imported unit of the import good
Figure
In the book’s discussion on optimal tariffs, it is mentioned that a certain tariff would be trade-restrictive, a so-called “prohibitive tariff rate.” See the figure above, where quantity and price are for bouncy balls. Assume that the world market price is 3 kronor. The figure also shows the domestic price if the country in question, which is a small country, imposes an import tariff of 3 kronor per bouncy ball. What would the trade-restrictive tariff rate be for this country, in kronor per bouncy ball?
Choose one or no option:
0
3
5
14
11
5
A certain tariff is considered an optimal tariff most likely in which of the following cases?
Choose one or no option:
An ad valorem tariff imposed by a small country
A low tariff imposed by a large country
A high tariff imposed by a large country
A high tariff imposed by a small country
A low tariff imposed by a small country
A low tariff imposed by a large country
The so-called “infant industry” argument served as an important theoretical basis for:
Choose one or no option:
motivating tariff reductions in Western Europe after World War II
the neo-colonial theory’s explanation of international exploitation
explaining the dynamics of the industrial revolution in Western Europe
import-substituting trade policy’
explaining the East Asian growth miracle
import-substituting trade policy’
The Brander-Spencer model identifies market failures in certain industries by highlighting:
Choose one or no option:
limited profit opportunities in research-intensive sectors
unfair competition
limited competition
lack of capital
negative externalities related to environmentally damaging emissions
limited competition
How much does it cost in dollars to buy a sweater that costs 50 pounds if the exchange rate is 1.25 dollars per pound?
Choose one or no option:
62.5 dollars
50 dollars
200 dollars
12.5 dollars
40 dollars
62.5 dollars
Which of the following statements is MOST accurate?
Choose one or no option:
Given a certain interest rate, an increase in the expected future exchange rate will cause the current exchange rate to fall today.
Given a certain interest rate in the USA and an unchanged expected future exchange rate, an increase in the interest rate in the euro area will cause the US dollar to appreciate against the euro.
Given a certain interest rate, an increase in the expected future exchange rate will have no effect on the current exchange rate today.
Given a certain interest rate, an increase in the expected future exchange rate will cause the current exchange rate to rise today.
Given a certain interest rate, a decrease in the expected future exchange rate will cause the current exchange rate to rise today
Given a certain interest rate, an increase in the expected future exchange rate will cause the current exchange rate to rise today.
All else being equal, when the gross domestic product ______, more goods and services will be sold in the economy, which causes the aggregate demand for money to ______.
Choose one or no option:
increases; remain unchanged
increases; decrease
increases; increase
decreases; increase
decreases; remain unchanged
increases; increase
Which of the following statements is MOST accurate regarding long-term exchange rates?
Choose one or no option:
A relative increase in U.S. production leads to a long-term depreciation of the dollar against the euro, while a relative increase in euro area production leads to a long-term appreciation of the dollar against the euro.
A relative decrease in U.S. production leads to a long-term depreciation of the dollar against the euro, while a relative increase in euro area production leads to a long-term appreciation of the dollar against the euro.
A relative increase in U.S. production leads to a long-term appreciation of the dollar against the euro, while a relative increase in euro area production leads to a long-term depreciation of the dollar against the euro.
A relative increase in U.S. production leads to a long-term depreciation of the dollar against the euro, while a relative decrease in euro area production leads to a long-term appreciation of the dollar against the euro.
A relative decrease in U.S. production leads to a long-term depreciation of the dollar against the euro, while a relative decrease in euro area production leads to a long-term appreciation of the dollar against the euro.
A relative increase in U.S. production leads to a long-term depreciation of the dollar against the euro, while a relative increase in euro area production leads to a long-term appreciation of the dollar against the euro.
How does an increase in real income affect aggregate demand?
Choose one or no option:
Increased Y means that YD increases which increases IM and then CA and thus AD fall but increased Y increases YD an thus C making AS still increases overall
Between which two variables does the DD relationship show all possible combinations where the product market is in equilibrium?
Choose one or no option:
Export and exchange rate
Output and exchange rate
Foreign prices and exchange rate
Import and export
Output and export
Output and exchange rate
Which of the following options is the BEST description of a balance of payments crisis?
Choose one or no option:
A sharp change in interest rates caused by changed expectations about export volume
A sharp change in interest rates caused by changed expectations about import volume
A sharp change in the currency reserve caused by changed expectations about import volume
A sharp change in the currency reserve caused by changed expectations about the future exchange rate
A sharp change in the currency reserve caused by changed expectations about domestic production
A sharp change in the currency reserve caused by changed expectations about the future exchange rate
In the book’s discussion of “internal balance,” it refers to:
Choose one or no option:
moderate inflation
full employment and rising real wages
full employment
full employment and price stability
full employment and low interest rates
full employment and price stability
Which of the following components is one of the three possible goals in the so-called trilemma when it comes to choosing monetary arrangements?
Choose one or no option:
restrictions on labor mobility
autonomous trade policy
monetary policy focused on domestic objectives
exchange rate fluctuations
limited global inflation
monetary policy focused on domestic objectives
