Question # 1

Direct investment and security purchases are classified as.

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Capital account transactions

Current account transactions

Unilateral transfer transactions

Merchandise trade transactions

The arrangement where goods imported from trading partners in the developing world are subject to lower tariff rates than goods from other countries is referred to as.

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Normal trade relation status

Most favored nation status

Generalized system of preferences

Which exchange rate system does not require monetary reserves for official exchange rate intervention.

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Floating exchange rates

Pegged exchange rates

Managed floating exchange rates

Dual exchange rates

The reduction or covering of foreign exchange risk is called.

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Hedging

Speculation

Intervention

Arbitrage

Exchange rate overshooting often occur because.

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Domestic prices adjust slowly to shifts in demand

Military spending increases during military's confects

Elasticities are smaller in the long run than the short run

Elasticities are smaller in the short run than the long run.

When one country provides most favored nation status for another if agrees to.

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Change that nation's product a lower tariff than any other nations

Charge that nation's products a tariff rate no higher than that on any other nation.

Charge that nation's products a higher tariff than any other nation's

Export to that nation any products that it wants to purchase

To stabilize the prices of primary products international commodity agreements have utilized all of the following except.

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Tariff -rate quotas applied to imported goods.

Production and export controls.

Buffer stocks

Multilateral contracts

A tax of 18 cents per unit of imported cheese would be an example of a.

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Compound tariff

Effective tariff

Ad valorem tariff

Specific tariff

If the home country government grants a subsidy on a domestically produced good domestic producers lend to.

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Capture the entire subsidy in the form of higher profits

Increases their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

The difference between a country's balances of payments and its balance of international indebtedness.

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Is equal of official reserve transactions

Occurs because of foreign exchange fluctuations

Reflects statistical discrepancies

Reflects the difference between flow and stock concepts

A main advantage of specialization results from

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Economics of large scale production

The specializing country behaving as a monoploidy.

smaller production runs resulting in lower unit costs

High wages paid to foreign workers

International trade is based on the idea that

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Exports should exceed imports

Imports should exceed exports

Resources are more mobile internationally than are goods

Resources are less mobile internationally than are goods

Specific tariffs are collected as

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Fixed amount of money per unit traded

a percentage of the price of the product

A percentage of the quantity of imports

All of the above

The effect of the most favored nation clause is to.

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Eliminate all tariffs between countries

Increase all tariff rates between countries.

Maintain a nondiscriminatory structure of tariffs

Maintain a discriminatory structure of tariffs

Those who argue in favor of import protection generally give the impression that such restricted trade will.

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Decrease the level of national security

Provide benefits to some particular industry

Provide benefits to the entire nation

Not yield welfare losses for the nation

Multinational corporations

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Always produce primary goods

Always produce manufactured goods

Products primary goods or manufactured goods

None of the above

The role of _________ is to direct one nation's savings into investments of another nation

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Merchandise trade flows

Service flows

Current account flows

Capital flows

Import quotas tend to result in all of the following except.

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Domestic producers of the imported good being harmed

Domestic consumers of the imported good being harmed

Prices increasing in the importing country

Price failing in the exporting country.

The _____ analyzes the income distribution effects of trade in the short run when resources are immobile among industries.

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Stolpher Samuelson theory

Factor endowment theory.

Specific factor theory

Over lapping demand theory

The "balance of trade" is a record of.

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Exports and imports of financial assets

The current account plus capital account

The net export of goods and services

The value of merchandise exports minus imports

In today world most countries impose tariffs

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Only on imports

Only on exports

On both imports and exports

On imports exports and nontrade goods

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