Question 1

The infant industry argument was an important theoretical basis for

Accepted Answer

A) neo-colonialist theory of international exploitation. 
B) import-substituting industrialization. 
C) historiography of the industrial revolution in Western Europe. 
D) the East-Asian miracle. 
E) the reduction of tariffs on Western Europe. 
A) neo-colonialist theory of international exploitation. 
B) import-substituting industrialization. 
C) historiography of the industrial revolution in Western Europe. 
D) the East-Asian miracle. 
E) the reduction of tariffs on Western Europe.

Question 2

-Refer to above figure.If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in agriculture?

Accepted Answer

The answer of  
-Refer to above figure.If OmL1 workers...

Question 3

Classical and Neoclassical trade theory makes the case that free trade can bring a country to an optimum and economically efficient use of its resources;and hence is an optimal trade-policy,if the objective is maximizing long term economic growth.There are those who argue that the experience of the Asian Miracle countries,such as Taiwan,South Korea and Singapore verify this argument in the real world.Explain.There are others who argue that the experience of these countries cannot be used to verify or support the argument above.Explain.

Accepted Answer

Both arguments may indeed be made.These

Question 4

The infant industry argument is that

Accepted Answer

A) comparative advantage is irrelevant to economic growth. 
B) developing countries have a comparative advantage in agricultural goods. 
C) developing countries have a comparative advantage in manufacturing. 
D) developing countries have a potential comparative advantage in manufacturing. 
E) developing countries have no chance to compete with industrialized countries. 
A) comparative advantage is irrelevant to economic growth. 
B) developing countries have a comparative advantage in agricultural goods. 
C) developing countries have a comparative advantage in manufacturing. 
D) developing countries have a potential comparative advantage in manufacturing. 
E) developing countries have no chance to compete with industrialized countries.

Question 5

The growth successes of the high performance Asian economies

Accepted Answer

A) supports the belief that economic development requires import substitution policies. 
B) rejects the belief that export-oriented industrialization is likely to promote economic development. 
C) rejects the belief that economic development requires import substitution policies. 
D) suggests that free trade policies are required for successful economic development. 
E) enforces United States' hesitation to trade with developing countries. 
A) supports the belief that economic development requires import substitution policies. 
B) rejects the belief that export-oriented industrialization is likely to promote economic development. 
C) rejects the belief that economic development requires import substitution policies. 
D) suggests that free trade policies are required for successful economic development. 
E) enforces United States' hesitation to trade with developing countries.

Question 6

-Refer to above figure.Why would workers not shift from agriculture to manufacturing in the initial situation where wages are higher in the latter?

Accepted Answer

Imperfecti

Question 7

-Refer to above figure.If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in manufacturing?

Accepted Answer

The answer of  
-Refer to above figure.If OmL1 workers...

Question 8

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

Accepted Answer

A) international commodity agreement 
B) export promotion 
C) multilateral contract 
D) import substitution 
E) export subsidies 
A) international commodity agreement 
B) export promotion 
C) multilateral contract 
D) import substitution 
E) export subsidies

Question 9

To help developing nations strengthen their international competitiveness,many industrial nations have granted tariff reductions to developing nations under the

Accepted Answer

A) international commodity agreements program. 
B) multilateral contract program. 
C) generalized system of preferences program. 
D) export led growth program. 
E) import substitution policy. 
A) international commodity agreements program. 
B) multilateral contract program. 
C) generalized system of preferences program. 
D) export led growth program. 
E) import substitution policy.

Question 10

The relatively rapid economic growth experienced by Chile in the late 1980s

Accepted Answer

A) supported the conventional Latin American reliance on import substitution. 
B) relied on the Harris-Todaro model to explain this growth. 
C) rejected the conventional Latin American reliance on import substitution. 
D) demonstrated the importance of market failure as a reason for import substitution. 
E) relied on high tariffs and import substitution. 
A) supported the conventional Latin American reliance on import substitution. 
B) relied on the Harris-Todaro model to explain this growth. 
C) rejected the conventional Latin American reliance on import substitution. 
D) demonstrated the importance of market failure as a reason for import substitution. 
E) relied on high tariffs and import substitution.

Question 11

The HPAE (High Performance Asian Economies)countries

Accepted Answer

A) have all consistently supported free trade policies. 
B) have all consistently maintained import-substitution policies. 
C) have all consistently maintained non-biased efficient free capital markets. 
D) have all maintained openness to international trade. 
E) have all outperformed the U.S. 
A) have all consistently supported free trade policies. 
B) have all consistently maintained import-substitution policies. 
C) have all consistently maintained non-biased efficient free capital markets. 
D) have all maintained openness to international trade. 
E) have all outperformed the U.S.

Question 12

-Refer to above figure.If manufacturing labor were to increase to OmL2,how much value would the economy as a whole gain?

Accepted Answer

The answer of  
-Refer to above figure.If manufacturing labor...

Question 13

In 2003,the per-capita income in China was roughly ________ of that in the U.S.

Accepted Answer

A) one hundredth 
B) one eighth 
C) one half 
D) the same as 
E) one twentieth 
A) one hundredth 
B) one eighth 
C) one half 
D) the same as 
E) one twentieth

Question 14

The remarkable success of the HPAEs proves that

Accepted Answer

A) trade policy is the key to successful economic growth. 
B) trade policy is irrelevant to successful economic growth. 
C) high educational standards is the key to successful economic growth. 
D) dual economies must suffer economic stagnation. 
E) trade policy can lead to a higher standard of living for developing countries. 
A) trade policy is the key to successful economic growth. 
B) trade policy is irrelevant to successful economic growth. 
C) high educational standards is the key to successful economic growth. 
D) dual economies must suffer economic stagnation. 
E) trade policy can lead to a higher standard of living for developing countries.

Question 15

The HPAE "economic miracle" illustrates a clear case in which

Accepted Answer

A) exports and growth were positively related. 
B) exports were promoted by successful economic growth. 
C) economic growth was determined by successful export promotion. 
D) trade policy dominated other considerations in promoting economic growth. 
E) import substitution enhanced economic development. 
A) exports and growth were positively related. 
B) exports were promoted by successful economic growth. 
C) economic growth was determined by successful export promotion. 
D) trade policy dominated other considerations in promoting economic growth. 
E) import substitution enhanced economic development.

Question 16

The disappointment with import-substitution policies is in part because

Accepted Answer

A) of the rapid and continuous growth record of South American countries. 
B) many countries pursuing this strategy experienced stagnation in their growth. 
C) this policy is inconsistent with sophisticated economic growth models. 
D) this policy tended to create world-class industrial competitors. 
E) of the financial investment lost by the U.S. 
A) of the rapid and continuous growth record of South American countries. 
B) many countries pursuing this strategy experienced stagnation in their growth. 
C) this policy is inconsistent with sophisticated economic growth models. 
D) this policy tended to create world-class industrial competitors. 
E) of the financial investment lost by the U.S.

Question 17

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Accepted Answer

A) discouraging exports. 
B) encouraging exports. 
C) encouraging an efficient use of a country's resources. 
D) generating large tariff revenues for the government. 
E) creating competitive manufacturing sectors. 
A) discouraging exports. 
B) encouraging exports. 
C) encouraging an efficient use of a country's resources. 
D) generating large tariff revenues for the government. 
E) creating competitive manufacturing sectors.

Question 18

Brazil's export record in 1999 illustrated the principle that

Accepted Answer

A) a large country will tend to have few exports. 
B) a small country will tend to have a high export ratio. 
C) protectionist policies tend to discourage exports. 
D) export-promoting policies do not tend to work. 
E) import substitution policies helped the Brazilian economy. 
A) a large country will tend to have few exports. 
B) a small country will tend to have a high export ratio. 
C) protectionist policies tend to discourage exports. 
D) export-promoting policies do not tend to work. 
E) import substitution policies helped the Brazilian economy.

Question 19

The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

Accepted Answer

A) proves that export promoting trade policy leads to relatively rapid economic growth. 
B) proves that a free-trade orientation of trade policy results in rapid economic growth. 
C) proves that exports help growth,whereas imports impede growth. 
D) proves that trade policy is the most important policy area for promotion of economic development. 
E) does not prove that trade liberalization always leads to rapid economic growth. 
A) proves that export promoting trade policy leads to relatively rapid economic growth. 
B) proves that a free-trade orientation of trade policy results in rapid economic growth. 
C) proves that exports help growth,whereas imports impede growth. 
D) proves that trade policy is the most important policy area for promotion of economic development. 
E) does not prove that trade liberalization always leads to rapid economic growth.

Question 20

Import substitution policies make use of

Accepted Answer

A) tariffs that discourage goods from entering a country. 
B) quotas applied to goods that are shipped abroad. 
C) production subsidies granted to industries with comparative advantage. 
D) tax breaks granted to industries with comparative advantage. 
E) production facilities provided by industrialized countries. 
A) tariffs that discourage goods from entering a country. 
B) quotas applied to goods that are shipped abroad. 
C) production subsidies granted to industries with comparative advantage. 
D) tax breaks granted to industries with comparative advantage. 
E) production facilities provided by industrialized countries.

Exam 11: Trade Policy in Developing Countries

The infant industry argument was an important theoretical basis for

-Refer to above figure.If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in agriculture?

The infant industry argument is that

The growth successes of the high performance Asian economies

-Refer to above figure.Why would workers not shift from agriculture to manufacturing in the initial situation where wages are higher in the latter?

-Refer to above figure.If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in manufacturing?

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

To help developing nations strengthen their international competitiveness,many industrial nations have granted tariff reductions to developing nations under the

The relatively rapid economic growth experienced by Chile in the late 1980s

The HPAE (High Performance Asian Economies)countries

-Refer to above figure.If manufacturing labor were to increase to OmL2,how much value would the economy as a whole gain?

In 2003,the per-capita income in China was roughly ________ of that in the U.S.

The remarkable success of the HPAEs proves that

The HPAE "economic miracle" illustrates a clear case in which

The disappointment with import-substitution policies is in part because

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Brazil's export record in 1999 illustrated the principle that

The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

Import substitution policies make use of

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

The Standard Trade 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

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

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