Question # 1

Two commodities are considered to be perfect substitutes for each other if the elasticity of substitution is

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Positive

Negative

Infinite

None of these

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

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Prices

Quantity

Revenue

Costs

Monopoly market is characteristics by

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A large number of sellers

Only one seller

Thousand of seller

All of these

A supply schedule shows the relations between the quantity supplied of a commodity over a given time and.

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Factor prices

Technology

Both a and b

The price of the commodity

International trade is based on the idea that.

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Exports should exceed imports

Imports a should exceed exports

Resources are more mobile internationally than are goods

Resources are less mobile internationally than are goods.

Your checking account is

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An asset for you and a liability for your bank

A liability for you and an asset for your bank

An asset for both you and your bank

A liability for both you and your bank

The relation ship between the exchange rate and 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

In Balance of payments accounting tourism and travel are classified in the

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Merchandise trade account

Services account

Unilateral transfers account

Capital account

A change in the full employment quantity of labor_________ the short run aggregate supply curve and ______ the long run aggregate supply curve.

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shifts ; shifts

shifts ; does not shift

does not shift ; shift

does not shift ; does not shift

If the % change in quantity demanded is more than % change in price coefficient of price elasticity is.

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>1

<1

=1

=zero

The nation, that, following currency depreciation, the balance of trade falls for a while before increasing is called a ________ effect.

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Relative price

Elasticity

J- Curve

Pass through

In order of practice price discrimination which of the following is needed.

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Some degree of monopoly power

An ability to separate the market

An ability to prevent reselling

All of the above

Industrial polices intended to foster comparative advantage for domestic industries could result in the implementation of.

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Research and development subsidies

Loan guarantees

Low interest rate loans

All of the above

The overall Budget Deficit is financed from

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External borrowing

Non bank borrowing domestically

Bank borrowing plus the above two at a and b

None of the above

Which of the following would most likely shift the production possibilities curve for a nation outward.

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A reduction in unemployment

An increases in the production of capital goods

A reduction in discrimination

An increase in the production of consumer goods

Export led growth strategies tend to emphasize.

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Resource allocation based on the principle of absolute advantage.

Resource allocation based on the principle of comparative advantage.

Trade protection for exporting competing firms

Trade protection for import competing firms

According to the cost based definition of dumping dumping occurs when a firm sets a product abroad at a price that is less than

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Average total cost

Average variable cost

Average foxed cost

Marginal cost

If there is a price celling, there will be.

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Shortages

surpluses

Equilibrium

None of these

The monetary base is composed of.

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Gold and silver

Currency and reserves

Currency only

Currency and checkable deposits

An increasingly higher marginal income tax is

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Progressive

Regressive

Proportional

Both b and c

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

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