Question 1

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

Accepted Answer

A) harm its terms of trade. 
B) have no effect on its terms of trade. 
C) improve its terms of trade. 
D) decrease its marginal propensity to consume. 
E) harm world terms of trade. 
A) harm its terms of trade. 
B) have no effect on its terms of trade. 
C) improve its terms of trade. 
D) decrease its marginal propensity to consume. 
E) harm world terms of trade.

Question 2

When the production possibility frontier shifts out relatively more in one direction,we have

Accepted Answer

A) biased growth. 
B) unbiased growth. 
C) immiserizing growth. 
D) balanced growth. 
E) imbalanced growth. 
A) biased growth. 
B) unbiased growth. 
C) immiserizing growth. 
D) balanced growth. 
E) imbalanced growth.

Question 3

Terms of trade refers to

Accepted Answer

A) the relative price at which trade occurs. 
B) what goods are imported. 
C) what goods are exported. 
D) the volume of trade. 
E) the tariffs applied to trade. 
A) the relative price at which trade occurs. 
B) what goods are imported. 
C) what goods are exported. 
D) the volume of trade. 
E) the tariffs applied to trade.

Question 4

If Slovenia were a large country in world trade,then if it imposes a large set of tariffs on its imports,this must

Accepted Answer

A) decrease the internal price of imports below the world market rate. 
B) cause retaliation on the part of its trade partners. 
C) harm Slovenia's real income. 
D) improve Slovenia's real income. 
E) improve the real income of its trade partners. 
A) decrease the internal price of imports below the world market rate. 
B) cause retaliation on the part of its trade partners. 
C) harm Slovenia's real income. 
D) improve Slovenia's real income. 
E) improve the real income of its trade partners.

Question 5

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

Accepted Answer

A) improve the real income of its trade partners. 
B) cause retaliation on the part of its trade partners. 
C) harm Slovenia's real income. 
D) improve Slovenia's real income. 
E) increase internal prices above the world market rate. 
A) improve the real income of its trade partners. 
B) cause retaliation on the part of its trade partners. 
C) harm Slovenia's real income. 
D) improve Slovenia's real income. 
E) increase internal prices above the world market rate.

Question 6

A country cannot produce a mix of products with a higher value than where

Accepted Answer

A) the isovalue line is tangent to the production possibility frontier. 
B) the isovalue line intersects the production possibility frontier. 
C) the isovalue line is above the production possibility frontier. 
D) the isovalue line is below the production possibility frontier. 
E) the isovalue line is tangent with the indifference curve. 
A) the isovalue line is tangent to the production possibility frontier. 
B) the isovalue line intersects the production possibility frontier. 
C) the isovalue line is above the production possibility frontier. 
D) the isovalue line is below the production possibility frontier. 
E) the isovalue line is tangent with the indifference curve.

Question 7

Tastes of individuals are represented by

Accepted Answer

A) indifference curves. 
B) production possibility frontiers. 
C) isovalue lines. 
D) production functions. 
E) the terms of trade. 
A) indifference curves. 
B) production possibility frontiers. 
C) isovalue lines. 
D) production functions. 
E) the terms of trade.

Question 8

If the ratio of price of cloth (PC)divided by the price of food (PF)increases in the international marketplace,then

Accepted Answer

A) the cloth exporter will increase the quantity of cloth produced. 
B) the cloth exporter will increase the quantity of cloth exported. 
C) the food exporter will increase the quantity of food exported. 
D) the cloth exporter will decrease the quantity of cloth exported. 
E) the country would import more cloth. 
A) the cloth exporter will increase the quantity of cloth produced. 
B) the cloth exporter will increase the quantity of cloth exported. 
C) the food exporter will increase the quantity of food exported. 
D) the cloth exporter will decrease the quantity of cloth exported. 
E) the country would import more cloth.

Question 9

An export subsidy will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.

Accepted Answer

A) exports;decrease;exports;increase 
B) imports;decrease;imports;increase 
C) imports;increase;imports;decrease 
D) exports;increase;exports;decrease 
E) exports;increase;imports;decrease 
A) exports;decrease;exports;increase 
B) imports;decrease;imports;increase 
C) imports;increase;imports;decrease 
D) exports;increase;exports;decrease 
E) exports;increase;imports;decrease

Question 10

An import tariff will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.

Accepted Answer

A) imports;decrease;imports;increase 
B) imports;increase;imports;decrease 
C) exports;increase;exports;decrease 
D) exports;decrease;exports;increase 
E) exports;increase;imports;decrease 
A) imports;decrease;imports;increase 
B) imports;increase;imports;decrease 
C) exports;increase;exports;decrease 
D) exports;decrease;exports;increase 
E) exports;increase;imports;decrease

Question 11

If a country began exporting product A and importing product B,then,as compared to the autarky (no-trade)situation,the marginal cost of product A will

Accepted Answer

A) increase. 
B) decrease. 
C) shift outward. 
D) shift inward. 
E) remain the same. 
A) increase. 
B) decrease. 
C) shift outward. 
D) shift inward. 
E) remain the same.

Question 12

An import tariff will cause the terms of trade of the ________ country to ________ and will ________ the country.

Accepted Answer

A) importing;improve;benefit 
B) exporting;improve;benefit 
C) importing;suffer;harm 
D) exporting;improve;harm 
E) importing;improve;harm 
A) importing;improve;benefit 
B) exporting;improve;benefit 
C) importing;suffer;harm 
D) exporting;improve;harm 
E) importing;improve;harm

Question 13

If the economy is producing at point a on its production possibility frontier,then

Accepted Answer

A) all of the country's workers are employed. 
B) all of the country's workers are specialized in one product. 
C) all of the country's capital is used for one product. 
D) all of its capital is used,but not efficiently. 
E) all of the country's exports are produced in equal amounts. 
A) all of the country's workers are employed. 
B) all of the country's workers are specialized in one product. 
C) all of the country's capital is used for one product. 
D) all of its capital is used,but not efficiently. 
E) all of the country's exports are produced in equal amounts.

Question 14

If a small country were to levy a tariff on its imports then this would

Accepted Answer

A) decrease the country's economic welfare. 
B) have no effect on that country's economic welfare. 
C) increase the country's economic welfare. 
D) change the terms of trade. 
E) raise prices on its exports in other countries. 
A) decrease the country's economic welfare. 
B) have no effect on that country's economic welfare. 
C) increase the country's economic welfare. 
D) change the terms of trade. 
E) raise prices on its exports in other countries.

Question 15

-Suppose,as a result of various dynamic factors associated with exposure to international competition,Albania's economy grew,and is now represented by the rightmost production possibility frontier in the figure above.If its point of production with trade was point c,would you consider this growth to be export-biased or import biased? If Albania were a large country with respect to the world trade of A and B,how would this growth affect Albania's terms of trade? Its real income?

Accepted Answer

If point c is the production point with

Question 16

If Slovenia is a small country in world trade terms,then if it imposes a large series of tariffs on many of its imports,this would

Accepted Answer

A) have no effect on its terms of trade. 
B) improve its terms of trade. 
C) deteriorate its terms of trade. 
D) decrease its marginal propensity to consume. 
E) increase its exports. 
A) have no effect on its terms of trade. 
B) improve its terms of trade. 
C) deteriorate its terms of trade. 
D) decrease its marginal propensity to consume. 
E) increase its exports.

Question 17

If the ratio of price of cloth (PC)divided by the price of food (PF)increases in the international marketplace,then

Accepted Answer

A) the terms of trade of cloth exporters will improve. 
B) all countries would be better off. 
C) the terms of trade of food exporters will improve. 
D) the terms of trade of all countries will improve. 
E) the terms of trade of cloth exporters will worsen. 
A) the terms of trade of cloth exporters will improve. 
B) all countries would be better off. 
C) the terms of trade of food exporters will improve. 
D) the terms of trade of all countries will improve. 
E) the terms of trade of cloth exporters will worsen.

Question 18

-Refer to the figure above,which shows a country's possible production possibility frontiers and indifference curves.If the country is producing at ________,then moving to ________ will cause utility to ________.

Accepted Answer

A) point b;point a;increase 
B) point a;point b;increase 
C) point c;point b;increase 
D) point c;point b;decrease 
E) point a;point c;remain unchanged 
A) point b;point a;increase 
B) point a;point b;increase 
C) point c;point b;increase 
D) point c;point b;decrease 
E) point a;point c;remain unchanged

Question 19

-Suppose Albania is exporting product B,and experienced economic growth biased in favor of product B as seen in the figure above.We are also told that Albania's new consumption point is at point d.Would you still consider the economic growth,which took place biased in favor of B? If Albania were a large country how would this growth affect its terms of trade?

Accepted Answer

This is a relatively difficult case.On t

Question 20

Rapidly growing developing countries tend to be borrowers on the international capital markets.From this information we may surmise that they have a comparative advantage in

Accepted Answer

A) future income. 
B) capital goods. 
C) disposable income. 
D) consumer goods. 
E) present income. 
A) future income. 
B) capital goods. 
C) disposable income. 
D) consumer goods. 
E) present income.

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

When the production possibility frontier shifts out relatively more in one direction,we have

Terms of trade refers to

If Slovenia were a large country in world trade,then if it imposes a large set of tariffs on its imports,this must

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

A country cannot produce a mix of products with a higher value than where

Tastes of individuals are represented by

If the ratio of price of cloth (P_C)divided by the price of food (P_F)increases in the international marketplace,then

An export subsidy will cause the relative demand for to and the relative supply for to .

An import tariff will cause the relative demand for to and the relative supply for to .

If a country began exporting product A and importing product B,then,as compared to the autarky (no-trade)situation,the marginal cost of product A will

An import tariff will cause the terms of trade of the country to and will the country.

If the economy is producing at point a on its production possibility frontier,then

If a small country were to levy a tariff on its imports then this would

If Slovenia is a small country in world trade terms,then if it imposes a large series of tariffs on many of its imports,this would

If the ratio of price of cloth (P_C)divided by the price of food (P_F)increases in the international marketplace,then

-Refer to the figure above,which shows a country's possible production possibility frontiers and indifference curves.If the country is producing at ,then moving to will cause utility to .

Rapidly growing developing countries tend to be borrowers on the international capital markets.From this information we may surmise that they have a comparative advantage in

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

Exam 6: The Standard Trade Model

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

When the production possibility frontier shifts out relatively more in one direction,we have

Terms of trade refers to

If Slovenia were a large country in world trade,then if it imposes a large set of tariffs on its imports,this must

If Slovenia were a large country in world trade,then if it instituted a large set of subsidies for its exports,this must

A country cannot produce a mix of products with a higher value than where

Tastes of individuals are represented by

If the ratio of price of cloth (PC)divided by the price of food (PF)increases in the international marketplace,then

An export subsidy will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.

An import tariff will cause the relative demand for ________ to ________ and the relative supply for ________ to ________.

If a country began exporting product A and importing product B,then,as compared to the autarky (no-trade)situation,the marginal cost of product A will

An import tariff will cause the terms of trade of the ________ country to ________ and will ________ the country.

If the economy is producing at point a on its production possibility frontier,then

If a small country were to levy a tariff on its imports then this would

If Slovenia is a small country in world trade terms,then if it imposes a large series of tariffs on many of its imports,this would

If the ratio of price of cloth (PC)divided by the price of food (PF)increases in the international marketplace,then

-Refer to the figure above,which shows a country's possible production possibility frontiers and indifference curves.If the country is producing at ________,then moving to ________ will cause utility to ________.

Rapidly growing developing countries tend to be borrowers on the international capital markets.From this information we may surmise that they have a comparative advantage in

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Developing Countries: Growth, Crisis, and Reform

Filters

If the ratio of price of cloth (P_C)divided by the price of food (P_F)increases in the international marketplace,then

An export subsidy will cause the relative demand for to and the relative supply for to .

An import tariff will cause the relative demand for to and the relative supply for to .

An import tariff will cause the terms of trade of the country to and will the country.

If the ratio of price of cloth (P_C)divided by the price of food (P_F)increases in the international marketplace,then

-Refer to the figure above,which shows a country's possible production possibility frontiers and indifference curves.If the country is producing at ,then moving to will cause utility to .