Question 1

According to traditional trade theory,a developing nation should export the commodity:

Accepted Answer

A) of its comparative advantage 
B) that it can produce relatively more efficiently 
C) intensive in the nation's relatively abundant factor 
D) all of the above 
A) of its comparative advantage 
B) that it can produce relatively more efficiently 
C) intensive in the nation's relatively abundant factor 
D) all of the above D

Question 2

What is the advantage of a policy of import substitution?

Accepted Answer

A) setting up an industry to replace imports minimizes risk of failure because the market for the product already exists in the nation as evidenced by the nation's imports of the commodity 
B) It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower their trade barriers against their manufactured exports 
C) foreign firms are induced to establish tariff factories to overcome the tariff wall of developing nations 
D) all of the above. 
A) setting up an industry to replace imports minimizes risk of failure because the market for the product already exists in the nation as evidenced by the nation's imports of the commodity 
B) It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower their trade barriers against their manufactured exports 
C) foreign firms are induced to establish tariff factories to overcome the tariff wall of developing nations 
D) all of the above. D

Question 3

Supporting the price of a commodity by buying it when its price is low is:

Accepted Answer

A) a buffer stock 
B) a purchase contract 
C) an export control 
D) a marketing board 
A) a buffer stock 
B) a purchase contract 
C) an export control 
D) a marketing board A

Question 4

When a nation's commodity terms of trade deteriorate and its single factoral terms of trade improve,the nation's welfare:

Accepted Answer

A) falls 
B) rises 
C) remains unchanged 
D) any of the above 
A) falls 
B) rises 
C) remains unchanged 
D) any of the above

Question 5

MacBean found that the export instability faced by developing nations was:

Accepted Answer

A) not very large and did not seriously interfere with development 
B) very large and seriously interfered with development 
C) very large but did not seriously interfere with development 
D) not very large but seriously interfered with development 
A) not very large and did not seriously interfere with development 
B) very large and seriously interfered with development 
C) very large but did not seriously interfere with development 
D) not very large but seriously interfered with development

Question 6

Which of the following is false with respect to traditional trade theory?

Accepted Answer

A) it can incorporate changes in factor endowments and technology 
B) it leads to the best allocation of resources at any point in time 
C) it is a dynamic theory 
D) it is based on comparative advantage 
A) it can incorporate changes in factor endowments and technology 
B) it leads to the best allocation of resources at any point in time 
C) it is a dynamic theory 
D) it is based on comparative advantage

Question 7

Trade cannot be an engine of growth for today's developing nations because:

Accepted Answer

A) the income elasticity for many of their exports is less than 1 
B) the development of synthetic substitutes 
C) technical advances reduced the raw-material content of many products 
D) all of the above 
A) the income elasticity for many of their exports is less than 1 
B) the development of synthetic substitutes 
C) technical advances reduced the raw-material content of many products 
D) all of the above

Question 8

The nation's commodity terms of trade times the productivity index in its export sector gives the nation's

Accepted Answer

A) income terms of trade 
B) double factoral terms of trade 
C) single factoral terms of trade 
D) barter terms of trade 
A) income terms of trade 
B) double factoral terms of trade 
C) single factoral terms of trade 
D) barter terms of trade

Question 9

Those nations that liberalized trade during the past decade

Accepted Answer

A) grew faster than those that did not 
B) grew more slowly than those that did not 
C) grew at about the same rate as those that did not 
D) any of the above 
A) grew faster than those that did not 
B) grew more slowly than those that did not 
C) grew at about the same rate as those that did not 
D) any of the above

Question 10

Which are is not an advantage of export-oriented industrialization?

Accepted Answer

A) It overcomes the smallness of the domestic market and allows developing nations to take advantage of economies of scale 
B) domestic industries grow accustomed to protection and have an incentive to become more efficient 
C) production of manufactured goods for export requires and stimulates efficiency throughout the economy 
D) the expansion of manufactured exports is not limited by the size of the domestic market 
A) It overcomes the smallness of the domestic market and allows developing nations to take advantage of economies of scale 
B) domestic industries grow accustomed to protection and have an incentive to become more efficient 
C) production of manufactured goods for export requires and stimulates efficiency throughout the economy 
D) the expansion of manufactured exports is not limited by the size of the domestic market

Question 11

The policy of import substitution was most vigorously followed by:

Accepted Answer

A) large developing nations during the 1970's 
B) large developing nations during the 1960's 
C) small developing nations during the 1970's 
D) small developing nations during the 1960's 
A) large developing nations during the 1970's 
B) large developing nations during the 1960's 
C) small developing nations during the 1970's 
D) small developing nations during the 1960's

Question 12

If the price of a nation's exports and imports both rise,the nation's commodity terms of trade:

Accepted Answer

A) improve 
B) deteriorate 
C) remain unchanged 
D) any of the above 
A) improve 
B) deteriorate 
C) remain unchanged 
D) any of the above

Question 13

According to Nurkse,international trade was an engine of growth for:

Accepted Answer

A) the regions of recent settlements during the 19th century 
B) regions of recent settlements during the 20th century 
C) developed nations during the 19th century 
D) developed nations during the 20th century 
A) the regions of recent settlements during the 19th century 
B) regions of recent settlements during the 20th century 
C) developed nations during the 19th century 
D) developed nations during the 20th century

Question 14

Which of the following is not part of the demand for a NIEO?

Accepted Answer

A) the establishment of international commodity agreements 
B) preferential access for the manufactured exports of developed nations 
C) removal of the agricultural trade barriers in developed nations 
D) increasing the yearly flow of foreign aid to developing nations 
A) the establishment of international commodity agreements 
B) preferential access for the manufactured exports of developed nations 
C) removal of the agricultural trade barriers in developed nations 
D) increasing the yearly flow of foreign aid to developing nations

Question 15

Developing nations often experience wildly fluctuating export prices for their primary products because of:

Accepted Answer

A) inelastic and stable demand and supply 
B) elastic and unstable demand and supply 
C) inelastic and unstable demand and supply 
D) elastic and stable demand and supply 
A) inelastic and stable demand and supply 
B) elastic and unstable demand and supply 
C) inelastic and unstable demand and supply 
D) elastic and stable demand and supply

According to traditional trade theory,a developing nation should export the commodity:

What is the advantage of a policy of import substitution?

Supporting the price of a commodity by buying it when its price is low is:

When a nation's commodity terms of trade deteriorate and its single factoral terms of trade improve,the nation's welfare:

MacBean found that the export instability faced by developing nations was:

Which of the following is false with respect to traditional trade theory?

Trade cannot be an engine of growth for today's developing nations because:

The nation's commodity terms of trade times the productivity index in its export sector gives the nation's

Those nations that liberalized trade during the past decade

Which are is not an advantage of export-oriented industrialization?

The policy of import substitution was most vigorously followed by:

If the price of a nation's exports and imports both rise,the nation's commodity terms of trade:

According to Nurkse,international trade was an engine of growth for:

Which of the following is not part of the demand for a NIEO?

Developing nations often experience wildly fluctuating export prices for their primary products because of:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters

Exam 11: International Trade and Economic Development

According to traditional trade theory,a developing nation should export the commodity:

What is the advantage of a policy of import substitution?

Supporting the price of a commodity by buying it when its price is low is:

When a nation's commodity terms of trade deteriorate and its single factoral terms of trade improve,the nation's welfare:

MacBean found that the export instability faced by developing nations was:

Which of the following is false with respect to traditional trade theory?

Trade cannot be an engine of growth for today's developing nations because:

The nation's commodity terms of trade times the productivity index in its export sector gives the nation's

Those nations that liberalized trade during the past decade

Which are is not an advantage of export-oriented industrialization?

The policy of import substitution was most vigorously followed by:

If the price of a nation's exports and imports both rise,the nation's commodity terms of trade:

According to Nurkse,international trade was an engine of growth for:

Which of the following is not part of the demand for a NIEO?

Developing nations often experience wildly fluctuating export prices for their primary products because of:

Introduction

The Law of Comparative Advantage

The Standard Theory of International Trade

Demand and Supply, Offer Curves, and the Terms of Trade

Factor Endowments and the Heckscherohlin Theory

Economies of Scale, Imperfect Competition, and International Trade

Economic Growth and International Trade

Trade Restrictions: Tariffs

Nontariff Trade Barriers and the New Protectionism

Economic Integration: Customs Unions and Free Trade Areas

International Resource Movements and Multinational Corporations

Balance of Payments

Foreign Exchange Markets and Exchange Rates

Exchange Rate Determination

The Price Adjustment Mechanism With Flexible and Fixed Exchange Rates

The Income Adjustment Mechanism and Synthesis of Automatic Adjustments

Open-Economy Macroeconomics: Adjustment Policies

Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply

Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination

The International Monetary System: Past, Present, and Future

Filters