Question # 1

If import licenses are auctioned off to domestic importers in a competitive market their scarcity value accurse to.

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Foreign corporations

Foreign workers

Domestic corporations

The domestic government

The institutional framework developed in 1974 to promote trade liberalization is known as.

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WTO

GATT

IMF

World bank

Similar to import tariffs import quotas tend to result in.

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Higher prices ad reduced imports

Increased government revenue

Increases consumer surplus

Decreased producer surplus

Which industrialization policy has developing countries used which places emphasis on the comparative advantage principle as a guide to resource allocation.

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Export promotion

Import substitution

International commodity agreements

Multilateral contrracts.

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.

International trade in goods and services tends to

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Increase all domestic costs and prices

Keep all domestic costs and prices at the same level

Lessen the amount of competition facing home manufactures.

Increase the amount of competition facing home manufacturers

Most tariffs have

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Only revenue effects

Only protective effects

Both protective ad revenue effects

Neither protective or revenue effects

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

In the calculation of gross domestic product net exports are.

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The sum of merchandise trade and services

The current account plus long term capital

The value of merchandise exports minus imports

Short term capital plus the basic balance

Tariff levels in advanced countries tend to be ___ tariff levels in developing countries.

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Higher than

Equal to

Lower than

There is no general pattern

If the international terms of trade settle at a level that is between each country's opportunity cost.

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There is no basis for gainful trade for either country

Both countries gain from trade

Only one country gains from trade

One country gains and the other country loses from trade

A nation wishing to reduce its current account deficit would be advised to.

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Engage in more government spending.

Reduce government taxes

Increase private investment spending

Decrease domestic consumption spending

Debit entries on the balance of payments are the entries that would.

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Mean a loss of foreign exchange

Bring foreign exchange into the country

Indicate a surplus exists

Exist at the bottom line a after all accounts are totaled.

The term of trade is given by theprices.

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Paid to all goods exported by the home country

Received for all goods exported by the home country

Received for exports and paid for imports.

Of primary products as opposed to manufactured products.

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

__________ 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 _____ 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

International dumping may involve.

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Selling goods to foreigners at a price below that charged domestic consumers

Selling goods to foreigners at a price below the cost of production

antidumping duties being levied on the imported dumped goods

All of the above

The comparative advantage model of Ricardo was based on.

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Interindustry specialization and trade

Demand conditions underlying specialization and trade

Income conditions underlying specialization and trade

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

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

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