Exam 18: International trade and finance

Exhibit 18-1 Production possibilities curves -In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.In Pada the cost of producing one more unit of corn is equal to:

Australia's net foreign liabilities are likely to become a problem if:

Exhibit 18-2 Production possibilities curves for US and Mexico -As shown in Exhibit 18-2,in Mexico,producing one additional ton of wheat costs:

The theory of comparative advantage suggests:

If a hotel room in Italy,priced at 120 000 lira per night,can be purchased for 80 Australian dollars,the exchange rate is:

The argument that foreign trade should be restricted to protect domestic employment and output is based on the idea that:

The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that:

If the US experiences higher inflation relative to Australia,then in the foreign exchange market,ceteris paribus,we would expect:

In order for an investment to exceed domestic saving,a country:

The account which records a nation's foreign economic transactions is called:

If it costs the DuPont Chemical Company more to make the chemical flaxinate in the United States than it does to make it in Taiwan,the Taiwanese must have:

Exhibit 18-1 Production possibilities curves -In Exhibit 18-1,the production possibilities curves of wheat and corn for Nabia and Pada are presented.Suppose Nabia produces at point A on its PPF.How many units of wheat is the country able to produce?

Exhibit 18-3 Potatoes and wheat output (tonnes per day) -In Exhibit 18-3,Australia has an absolute advantage in producing:

The balance of payments _____.

Which of the following is an infant-industry argument in favour of restrictions on foreign trade?

Exhibit 18-4 Dollars per British pound -In Exhibit 18-4,the equilibrium exchange rate is:

Which of the following are examples of free trade agreements?

A depreciation of one's currency means that:

The main explanation for why the cheap foreign-labour argument is a poor reason for restricting international trade is that:

Which of the following arguments are used to justify tariff protection?