Question # 1

A tax of 17 percent per imported item would be an example of a

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Ad valorem tariff

Specific tariff

effective tariff

Compound tariff

In developed countries tariffs on raw materials tend to be.

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Highest of all

Higher than on manufactured goods

Equal to tariffs on manufactured goods

Lower than on manufactured goods

If a nation has an open economy it means that the nation.

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Allows private ownership of capital

Has flexible exchange rates

Has fixed exchange rates

Conducts trade with other countries

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.

A current account surplus implies that

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The country is a net lender to the rest of the world

The country is running a net capital account surplus

Foreign investment in domestic securities is at very low levels

All of the above

That the division of labor a limited by the size of the market best applies to which explanation of trade

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Factor endowment theory

Product life cycle theory

Economies of scale theory

Over lapping demand theory.

Quotas are government imposed limits on the ___ of goods trade between countries.

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Prices

Quantity

Revenue

Costs

Dynamic gains from trad could result from

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The stimulus of additional investment spending as markets open

Economies of large scale production as markets open

Additional competition made possible by the opening of markets

All of the above

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

Advocates of industrial policy maintain that government should.

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Purse free trade as a policy that leads to maximum global efficiency

Grant subsides to firms offering potential comparative advantage.

Provide loans to domestic workers in exporting industries.

Increase interest rates on loans made to firms in import competing industries.

according to factor price equalization theorem, if country A is labor abundant then once trade opens.

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Wages and rents should fall in A

Wages and rents should rise in A

Wages should rise and rents should fall in A

Wages should fall and rents should rise in A

Small nations with more than one major trading partner lend to peg the value of their currencies to.

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gold

silver

a single currency

a basket of currencies

The current account includes

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The value of trade in merchandise

Services

Unilateral transfers

All of the above

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.

The relationship between the exchange rate ad the prices of tradable goods is known as the.

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Purchasing power parity theory

Asset markets theory

Monetary theory

Balance of payments theory

__________ policies attempt to foster industrialization by establishing high barriers to import of foreign goods to promote local production.

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absolute advantage

Comparative advantage

Export led growth

Import substitution

The movement to free international trade is most likely to generate short term unemployment in which industries'.

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Industries in which there are neither imports nor exports

Import competing industries.

Industries that sell to domestic and foreign buyers

Industries that sell to only foreign buyers

The result of antidumping tariffs is to.

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increase consumer surplus in the importing country

Decrease producer surplus in the importing country

Impose a price floor on foreign prices in the importing country

Impose a price celling on foreign prices in the importing county

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

The supply of foreign currency tends to be

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Upward sloping

Down ward sloping

Vertical

Any of the above

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