Question # 1

According to the factor endowment model of Hackshcer and Ohlin countries heavily endowed with land will.

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Devote excessive amounts of resources to agricultural production.

Devote insufficient amounts of resources to agricultural production

Export products that are and intensive.

Import products that are land intensive

The difference between what consumers have to pay for a particular and what they are willing to pay is known as.

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Consumer surplus

Producer surplus

Dead weight costs

Dead weight surplus

Credit (+) items in the balance of payments correspond to anything that.

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Involves receipts from foreigners

Involves payments to foreigners

Increases the domestic money supply

Decrease the demand for foreign exchange

Nontariff trade barriers could include all of the following except.

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Domestic content laws

Government procurement polices

Health , safety, and environmental standards

Antidumping counter/vialling duties applied to imports.

The NAFTA is a

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Monetary union

Free trade area

Common market

Customs union

Trade based on comparative advantage assures that.

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Only the strongest suvrive

Some people are rich and others are poor

Each item is produced using the least amount of time needed to produce it

Each item is produced at as low a cost possible in terms of other things given up

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

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

Which of the following organizations primarily provides long term loans to developing countries to help them develop their infrastructure such as schools hospitals and roads.

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World Bank

International Monetary fund

Council on foreign Relations

Organization of petroleum exporting countries

Multinational corporations

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Always produce primary goods

Always produce manufactured goods

Products primary goods or manufactured goods

None of the above

Which trade policy results in the government levying both a specific tariff and an advalorem tariff on imported goods.

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Compound tariff

Nominals tariff

Effective tariff

Revenue tariff

The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different.

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Tastes and preferenes

Expectations of future interest rate levels

Per capita income levels

Labor productivities

Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differtial in excess of transaction costs are called.

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Differential actions

Cash transactions

Arbitrage

Forward transactions

The balance of trade can only worsen if income________ relative to absorption

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Increases

Decreases

Adjustment mechanism

Currency contract period

All of the following are debit items in the balance of payment eexcept.

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Capital outflows

merchandise exports

Private gifts to foreigners

Foreign and granted to other nations

Debit (-) items in the balance of payments correspond to anything that.

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Involve receipts from foreigners

Involves payments to foreigners

Increase the domestic money supply

Decrease the demand for foreign exchange

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

In the classical model of Ricardo the direction of trade is determined by

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Absolute advantage

Comparative advantage

Physical advantage

Which way the wind blows

The gain from international trade are closely related to.

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the labor theory of value

How much the autarky price differs from international terms of trade change.

The fact that a country must lose from trade

All of the above

According to the Hackscher - Ohlin model the source of comparative advantage is a country's

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Technology

Advertising

Factor endowments

both a and c

Ad valorem tariffs are collected as.

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Fixed amounts of money per unit traded

A percentage of the price of the product

A percentage of the quantity of imports

All of the above

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