tenta 2023 3 Flashcards
Which of the following alternatives is MOST accurate regarding the extent of Swedish exports, measured as a share of Swedish GDP, over the past decades?
Choose one or no alternatives:
30-40%
20-30%
40-50%
0-10%
10-20%
40-50%
Unit labor requirements
Badankor Badbollar
Home 10. 20
Foregin 60 30
The table above shows unit labor requirements. Given the information in the table, what is the opportunity cost of beach balls in terms of rubber ducks in Home?
Choose one or no alternatives:
2.0
1.5
6.0
3.0
0.5
2.0
A country that trades according to the Ricardian trade model will likely be at a consumption combination that is
Choose one or no alternatives:
within its production possibilities curve
within its trade partner’s production possibilities curve
on its production possibilities curve
outside its production possibilities curve
on its trade partner’s production possibilities curve
outside its production possibilities curve
International trade in the specific-factors model can have a significant effect on income distribution when
Choose one or no alternatives:
different production factors are used in different sectors
rich countries exploit poor countries
different countries use different currencies
the most powerful country dictates the terms of trade
corruption occurs within government institutions
different production factors are used in different sectors
The production of good Y is measured along the vertical axis, and the production of good X is measured along the horizontal axis. MPL is the marginal product of labor, where the subscript indicates for which good. P is the price of the good, and w is the wage.
The slope of a country’s production possibility curve is equal to ________, and the optimal production point is found where the slope is equal to ________.
-MPLY/MPLX: -PX/PY
In the specific-factor model, an increase in the price of food by 0 percent combined with an increase in the price of cloth by 5 percent would lead to wages ________, causing the production of cloth to ________ and the production of food to ________.
Select one or no options:
remain unchanged; increase; increase
increase by less than 5 percent; increase; decrease
remain unchanged; decrease; decrease
increase by more than 5 percent; increase; remain unchanged
increase by 5 percent; remain unchanged; remain unchanged
increase by less than 5 percent; increase; decrease
In the Heckscher-Ohlin model with two production factors and two goods, the country that is relatively abundant in ________ will have a production possibility curve that is biased toward the production of the ________ good.
Select one or no options:
capital; capital-intensive
labor; capital-intensive
labor; land-intensive
land; labor-intensive
land; capital-intensive
capital; capital-intensive
The Heckscher-Ohlin model shows that when two countries start trading with each other, it will result in
Select one or no options:
the relative prices of production factors in the two countries becoming more different
the relative prices of traded goods in the two countries converging
all owners of production factors benefiting in both countries
the gains from international trade being equally large for the two countries
all owners of production factors benefiting in one country, but perhaps none benefiting in the other
the relative prices of traded goods in the two countries converging
If a small country imposes an import tariff on a good for which there are no economies of scale in production, this will
Select one or no options:
raise the price of its export goods to other countries
reduce the country’s welfare
improve the country’s welfare
not affect the country’s welfare
change the country’s terms of trade
reduce the country’s welfare
An export subsidy, if imposed by a large country, will lead to the relative demand for __________ decreasing and the relative supply of __________ increasing.
Select one or no options:
export goods; increase; export goods; decrease
export goods; decrease; export goods; increase
import goods; increase; export goods; decrease
export goods; increase; import goods; decrease
import goods; decrease; import goods; increase
export goods; decrease; export goods; increase
Internal economies of scale can
Select one or no options:
not be a contributing cause of international trade
occur in a sector where there is perfect competition
occur only in sectors where sophisticated products such as airplanes are produced
refer to the relationship between companies within an industrial sector but not to the characteristics of production within individual companies
not occur in a sector where there is full competition
not occur in a sector where there is full competition
A good is produced in a sector where there is monopolistic competition with economies of scale. If this industrial sector existed in two countries and these two countries engaged in trade with each other, we would expect that
Select one or no options:
the country that is relatively rich in the production factor that is intensively used in the production of this good will export it
these countries will export different variants of the good to each other
neither of the countries will export the good as neither has a comparative advantage
the country where the price of the good is lower will export it
the countries will only trade with other countries that they do not directly compete with
these countries will export different variants of the good to each other
The main redistribution effect of an import tariff is a transfer of income from
Select one or no options:
domestic producers to the domestic public sector
domestic consumers to domestic producers
the domestic public sector to domestic consumers
foreign producers to domestic consumers
domestic producers to domestic consumers
domestic consumers to domestic producers
An important difference between import tariffs and import quotas is that import tariffs always
Select one or no options:
are paid only by foreign producers
benefit domestic producers
stimulate international trade
increase the price of the protected good
generate revenue for the government (public sector)
generate revenue for the government (public sector)
The reason why support for protectionism remains strong in the USA is primarily that
Select one or no options:
the welfare losses from protectionism are diffuse, which complicates opinion and lobbying efforts that advocate for free trade
economists cannot agree on which trade policy is most beneficial
the welfare gains from free trade primarily benefit narrow interest groups that are unable to influence public opinion
economists cannot convince the public that free trade is beneficial
economists can produce any results they are commissioned to provide
the welfare losses from protectionism are diffuse, which complicates opinion and lobbying efforts that advocate for free trade
What conclusion can be drawn from the fact that the growth rate in Brazil and other Latin American countries has actually been slower since trade liberalization in the late 1980s than during the period of import-substituting trade policies?
Select one or no options:
It proves that export-promoting trade policies lead to relatively fast economic growth.
It proves that a free trade orientation in trade policy results in rapid economic growth.
It proves that export contributes to growth, while import hinders growth.
It proves that trade policy is the most important policy area for promoting economic development.
It does not prove that trade liberalization always leads to rapid economic gro
It does not prove that trade liberalization always leads to rapid economic gro
When Japan’s MITI (Ministry of International Trade and Industry) focused resources on the semiconductor industry, and particularly on Random Access Memory (RAM), it was seen as an attempt to create a new dynamic sector. The results, as viewed from the late 1990s,
Select one or no options:
supported the Brander-Spencer model.
contributed to securing Japan’s leading position in high-tech manufacturing.
helped shift economists’ focus away from industrial policy in the Japanese style.
motivated this perception.
led to a similar industrial policy in the USA.
contributed to securing Japan’s leading position in high-tech manufacturing.
Assume (absolute) purchasing power parity theory, that we have no transport costs or other trade barriers, and assume that all else is equal in the following purely hypothetical example. What is the exchange rate between the dollar and the British pound if a pair of American jeans costs 50 dollars in New York and 100 pounds in London?
Select one or no options:
2 dollars per pound
50 dollars per pound
2.5 dollars per pound
1.5 dollars per pound
0.5 dollars per pound
0.5 dollars per pound
If the interest rate in Sweden is 5 percent and the interest rate in the euro area is 3 percent, an investor should
Select one or no options:
only invest in the euro area if the expected depreciation of the krona against the euro is less than 2 percent.
only invest in Sweden.
only invest in Sweden if the expected depreciation of the krona against the euro exceeds 2 percent.
be indifferent between investing in Sweden and investing in the euro area if the expected depreciation of the krona against the euro is 2 percent.
only invest in the euro area.
be indifferent between investing in Sweden and investing in the euro area if the expected depreciation of the krona against the euro is 2 percent
If individuals have more money than they demand, they will
Select one or no options:
the central bank will want to raise interest rates
they will try to reduce their liquidity by purchasing interest-bearing assets
they will want to keep their money holdings constant
they will try to reduce their liquidity by purchasing goods
they will try to reduce their liquidity by converting real money holdings into nominal money holdings
they will try to reduce their liquidity by purchasing interest-bearing assets
Which of the following statements is MOST correct?
Select one or no options:
If (absolute) PPP holds, then the law of one price must apply to all goods.
If the law of one price applies to each good, then (absolute) PPP must also hold.
If the law of one price does not apply to all goods and the baskets of goods used to calculate price levels in different countries are the same, then (absolute) PPP cannot hold.
If (absolute) PPP holds and the baskets of goods used to calculate price levels in different countries are the same, then the law of one price also applies to each individual good.
If the law of one price applies to all goods and the baskets of goods used to calculate price levels in different countries are the same, then (absolute) PPP must hold.
If the law of one price applies to all goods and the baskets of goods used to calculate price levels in different countries are the same, then (absolute) PPP must hold.
In the short term, in the AA-DD diagram, a decrease in public purchases (G) will cause
Select one or no options:
a shift of the DD curve to the right and a decrease in output
a shift of the DD curve to the left and an appreciation of the currency
a shift of the DD curve to the right and an increase in output
a shift of the DD curve to the left and a decrease in output
a shift of the DD curve to the left and an increase in output
a shift of the DD curve to the left and a decrease in output
Which of the following statements is MOST correct?
Select one or no options:
A devaluation occurs when E, the number of units of domestic currency per unit of foreign currency, rises and a revaluation occurs when E falls.
A devaluation occurs when the central bank lowers E, the number of units of domestic currency per unit of foreign currency, and a revaluation occurs when the central bank raises E.
A devaluation occurs when the central bank raises E, the number of units of domestic currency per unit of foreign currency, and a revaluation occurs when the central bank lowers E.
A devaluation occurs when a central bank in another country lowers E, the number of units of our domestic currency per unit of the (for us) foreign currency, and a revaluation occurs when the other country’s central bank raises E.
A devaluation occurs when the central bank raises E, the number of units of foreign currency per unit of domestic currency, and a revaluation occurs when the central bank lowers E.
A devaluation occurs when the central bank raises E, the number of units of domestic currency per unit of foreign currency, and a revaluation occurs when the central bank lowers E.
The classical gold standard extended…
Select one or no options:
up to the First World War
up to the outbreak of the global financial crisis in 2008
from the end of the Second World War to the early 1970s
from the beginning of the 1970s to the mid-1990s
between the First and Second World Wars
up to the First World War
