Tenta 2023 1 Flashcards
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If there are large differences in wage levels between countries, trade between them will likely
Choose one or none of the alternatives:
harm the country with the lower wage level
harm the country with the higher wage level
harm both countries
have no effect on either country
not be harmful to any of the countries
have no effect on either country
The two neighbors of the United States trade more with the U.S. than European economies of similar size.
Choose one or none of the alternatives:
This is consistent with the predictions of gravity models
This relates to Belgium’s trade volumes with the U.S.
This is due to the unusually large GDP figures of these neighboring countries
It is consistent with the predictions of the gravity model
This does not relate at all to the conclusions that can be drawn from gravity models
It is consistent with the predictions of the gravity model
Trade between two countries can benefit both countries if they each
Choose one or none of the alternatives:
produce a wide range of goods for export
have a more elastic supply of exported goods
export the good in which they have a comparative advantage
have a more elastic demand for imported goods
have advantageous terms of trade
export the good in which they have a comparative advantage
Fotbolls cucumbers
Sweden 10 20
Spain 60 30
Based on the information given in the table concerning the countries of Sweden and Spain. Suddenly, the economy in Sweden starts functioning completely differently for unclear reasons, resulting in the unit labor requirements in Sweden temporarily doubling to 20 for footballs and 40 for cucumbers. Given this, Sweden should:
Choose one or none of the alternatives:
export both footballs and cucumbers and not import anything
export cucumbers
neither export nor import anything
export footballs
export cucumbers and import footballs
export footballs
In the specific factor model, an increase in the price of food by 5 percent, together with an increase in the price of textiles by 0 percent, would lead to wages ________, textile production ________, and food production ________.
Choose one or none of the alternatives:
remained unchanged; fell; fell
increased by 5 percent; remained unchanged; remained unchanged
remained unchanged; increased; increased
increased by more than 5 percent; increased; remained unchanged
increased by less than 5 percent; fell; increased
increased by less than 5 percent; fell; increased
figure
Based on the specific factor model and the figure with production possibility curves above. Assume that the economy is in equilibrium at point e. If, as a result of migration, the country’s workforce were to become much larger, the new equilibrium would likely be at …
Choose one or none of the alternatives:
point e
point f
point b
point d
point h
Point h
Which of the alternatives below is the BEST continuation of the following sentence?
In the Heckscher-Ohlin model with two factors of production (capital and labor) and two goods, a sudden and significant inflow of workers to a country would mean that
Choose one or none of the alternatives:
the production possibility curve shifts outward, and the production of the labor-intensive good decreases.
the production possibility curve shifts outward, and the production of both goods increases.
the production possibility curve shifts outward, and the production of the capital-intensive good decreases.
the production possibility curve shifts outward, and the existing labor in the country is crowded out by the inflow.
production moves to another point along the country’s production possibility curve.
the production possibility curve shifts outward, and the production of the capital-intensive good decreases.
If a country can produce good Y (measured along the vertical axis) and good X (measured along the horizontal axis), then the absolute value of the slope of its production possibility curve is always equal to
Choose one or none of the alternatives:
the price of good Y divided by the price of good X
the opportunity cost of good X in terms of good Y
the opportunity cost of good Y in terms of good X
the price of good X divided by the price of good Y
the capital cost (assuming good Y is the capital-intensive good) divided by the labor cost
the opportunity cost of good X in terms of good Y
If the ratio between the price of cloth and the price of food rises on the international markets, this will result in
Choose one or none of the alternatives:
all countries clearly benefiting
the terms of trade for cloth exporters deteriorating
the terms of trade for cloth exporters improving
the terms of trade for food exporters improving
the terms of trade improving for all countries
the terms of trade for cloth exporters improving
If points A and B are different points (combinations of goods) that lie on a country’s production possibilities curve, then:
must both of these combinations of goods have the same relative cost
are the producers indifferent between these two combinations of goods
are the consumers indifferent between these two combinations of goods
the country can produce both of these combinations of goods simultaneously
the country can produce either of these two combinations of goods
the country can produce either of these two combinations of goods
When external economies of scale exist, trade between two countries will:
unambiguously reduce welfare in both countries
unambiguously increase welfare in both countries
unambiguously reduce welfare in the exporting country and increase welfare in the importing country
unambiguously increase welfare in the exporting country and reduce welfare in the importing country
either increase or not increase welfare in both countries
either increase or not increase welfare in both countries
If the market for a good produced by companies in a sector with monopolistic competition ? there will be ? companies in the market, each company’s production will be ? and the companies will charge a _______ price.
Choose one alternative:
shrinks; fewer; smaller; higher
shrinks; fewer; smaller; lower
shrinks; fewer; larger; higher
shrinks; more; smaller; higher
shrinks; more; smaller; lower
shrinks; fewer; smaller; higher
A reduced tariff on imported steel would most likely benefit:
foreign consumers of steel
domestic consumers of steel
workers in the domestic steel industry
foreign producers at the expense of domestic consumers
domestic producers of steel
domestic consumers of steel
If a good (produced without economies of scale) is imported into the large country “Home” from the country “Foreign,” then the introduction of a tariff in “Home” will:
increase the price of the good in both countries (“the law of one price”)
decrease the price of the good in Home and may increase it in Foreign
decrease the price of the good in both countries (“the law of one price”)
increase the price in Home but not affect the price in Foreign
increase the price of the good in Home and decrease it in Foreign
increase the price of the good in Home and decrease it in Foreign
The WTO was established as a successor to a previous organization. What was its name?
UN
World Bank
IMF
GATT
UNCTAD
GATT
Which industrialization policy, used by developing countries, emphasizes the principle of comparative advantage as guidance for resource allocation?
Intra-industry trade practice
Export promotion
Import substitution
Promotion of new industries (infant industry)
International commodity agreements
Export promotion
Companies do not control all the value that their activities create. The presence of such positive external effects can therefore be used in trade policy discussions
Choose one or no alternative:
to support arguments for protectionism
to support the conclusions of the Heckscher-Ohlin model
to reject the usefulness of protectionism
to support arguments for free trade
to support a policy that only subsidizes high-tech industries
to support arguments for protectionism
How many dollars would it cost to buy an English-made knitted wool sweater that costs 30 pounds if the exchange rate is 1.5 dollars per pound?
Choose one or no alternative:
30
45
20
40
15
45
Assume a financial investor in the USA who holds dollars but wants to invest in a eurozone country. Based on the model discussed in the course lectures, what is the expected return in dollars for this investor from an investment in euros if today’s exchange rate is 1.10 dollars per euro, next year’s expected exchange rate is 1.165 dollars per euro, the interest rate on dollar investments in the USA is 10 percent, and the interest rate on euro investments in the eurozone is 5 percent?
Choose one or no alternative:
-1 percent
5 percent
0 percent
10 percent
11 percent
11 percent
If there is an excess supply of money, according to our money market model,
Choose one or no alternatives:
the interest rate will rise
the real money supply curve will shift inward to restore equilibrium
the real money supply curve will shift outward to restore equilibrium
the interest rate will fall
the interest rate will remain constant, but consumption will decrease
the interest rate will fall
If we imagine a world consisting only of Sweden and the EU, and consider the real exchange rate from a Swedish perspective, an increase in the world’s relative demand for EU’s production will result in:
Choose one or no alternatives:
long-term real depreciation of the krona against the euro
short-term real appreciation of the krona against the euro
long-term real depreciation of the euro against the krona
long-term real appreciation of the krona against the euro
short-term real depreciation of the euro against the krona
long-term real depreciation of the krona against the euro
A temporary tax increase, in the AA-DD diagram, will:
Choose one or no alternatives:
shift the DD curve to the right
shift the AA curve to the left
shift the AA curve, but unclear in which direction
shift the DD curve to the left
shift the AA curve to the right
shift the DD curve to the left
A balance of payments crisis is best described as
Choose one or no alternatives:
a significant change in the currency reserve due to a change in expectations about imports
a significant change in the currency reserve triggered by changed expectations about domestic production
a significant change in the interest rate triggered by a change in expectations about imports
a significant change in the currency reserve triggered by a change in expectations about the future exchange rate
a significant change in interest rates triggered by a change in expectations about exports
a significant change in the currency reserve triggered by a change in expectations about the future exchange rate
Which of the following options is one of the alternatives included in the “trilemma” regarding a country’s choice of monetary regime?
Choose one or no alternatives:
free capital mobility
tariffs
restrictions on labor migration
deregulated markets for securities trading
global inflation
free capital mobility
