Question # 1

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

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Prices

Quantity

Revenue

Costs

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

According to the________ the export of the product that embodies large amounts of the relatively cheap, abundant resorce results in an increase in its price and income of the resource used intensively in the import competing product decrease as its demand falls.

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Ricardian equivalence theorem

Smithian equivalence theorem

Stolpher Samuelson theorem

Bemanke Greenspan theorem

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

To be considered a good candidate for an export cartel a commodity should.

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Be a manufactured good

Be a primary product

Have a high price elasticity of supply

Have a low price elasticity of demand

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

A product will be traded only if the pre trade price difference between the two countries

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Is less than the cost of transporting it between them

is greater than the cost of transporting it between them

Equals the cost of transporting it between them

More information is needed to answer this question

Which financial instruments provide a buyer the right to purchase or sell a fixed amount of currency at a prearranged price within a few days to a coupled of years.

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Letter of credit

Foreign currency option

Cable transfer

Bill of exchange

When the price of foreign currency exchange is above the equilibrium level.

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An excess demand for that currency exists in the foreign exchange market.

An excess supply of the currency exists in the foreign exchange market

The demadn for foreign exchange shifts outward to the right

The demand for foreign exchange shifts backward to the left.

Poor developing countries typically impose ______ tariffs than rich advanced nations on imports.

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Lower

Higher

About the same height

None of the above

If tastes are identical between countries then comparative advantage is determined by

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Supply conditions only

Demand conditions only

Supply and demand conditions

Can't tell without more information.

Intra industry trade therory.

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Explains why the United States might export autos and import clothing

Explains why the united states might export and import differentiated versions of the same product such as different type of autos.

Assumes that transport costs are very low or do not exist

Ignores seasonal considerations for agricultural goods

Direct investment and security purchases are classified as.

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Capital account transactions

Current account transactions

Unilateral transfer transactions

Merchandise trade transactions

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.

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