Question # 1

Current account deficits are offset by

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Merchandise trade deficits

Merchandise trade surpluses

Capital /financial account surpluses

Capital /financial account deficits

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

The earliest statement of the principle of comparative advantage in associated with

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Adam Smith

David Ricardo

E . Heckscher

Bertil Ohlin

Which exchange rate mechanism is intended to insulates the balance of payments from short term capital movements while providing exchange rate stability for commercial transactions.

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Dual exchange rates

Managed floating exchange rates

Adjustable pegged exchange rates

Crawling pegged exchange rates.

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

Should international transpiration costs decrease the effect on international trade would include a.

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Increases in the volume of trade

Smaller gain from trade

Decline in the income of home producers

Decrease in the level of specialization in production.

All of the following are credit items in the balance of payments except.

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Investment inflows

Merchandise exports

Payment for American service's to foreigners

Private give to foreign residents

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

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

Small nations whose trade and financial relationships are mainly with a single partner tend to utilize.

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Pegged exchange rates

Freely floating exchanged rates

Managed floating exchange rates

Crewing exchange rates.

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

Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove payments disequilibrium.

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Dual exchange rates

Adjustable pegged exchange rates

Managed floating exchange rates

Crawling pegged exchange rates.

According to the factor price equalization theorem, the ______ factor should oppose free trade policies in any given country.

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Abundant

scarce

Neither

Can't tell without more information

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

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