Question 1

The gravity model explains why

Accepted Answer

A)  trade between Sweden and Germany exceeds that between Sweden and Spain. 
B)  countries with oil reserves tend to export oil. 
C)  capital rich countries export capital intensive products. 
D)  intra-industry trade is relatively more important than other forms of trade between neighboring countries. 
E)  European countries rely most often on natural resources. 
A)  trade between Sweden and Germany exceeds that between Sweden and Spain. 
B)  countries with oil reserves tend to export oil. 
C)  capital rich countries export capital intensive products. 
D)  intra-industry trade is relatively more important than other forms of trade between neighboring countries. 
E)  European countries rely most often on natural resources.

Question 2

The Services sector has been steadily rising in relative importance in GDP of the United States, as well as elsewhere around the world. Since "services" have been identified as "non-tradables" (e.g., it is difficult to export haircuts), it may be argued that this trend will likely slow the rapid growth in international trade. Discuss.

Accepted Answer

This argument stands on questionable log

Question 3

In the past half century, the developing countries have experienced major compositional shifts from exports of primary products (including agricultural and raw materials) to exports of manufactures. How might you explain this in terms of broad historical developments during this period?

Accepted Answer

Any discussion of the export experience

Question 4

Why does the gravity model work?

Accepted Answer

A)  Large economies became large because they were engaged in international trade. 
B)  Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment. 
C)  Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country. 
D)  Large economies tend to have large incomes and tend to spend more on imports. 
E)  Large economies tend to avoid trading with small economies. 
A)  Large economies became large because they were engaged in international trade. 
B)  Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment. 
C)  Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country. 
D)  Large economies tend to have large incomes and tend to spend more on imports. 
E)  Large economies tend to avoid trading with small economies.

Question 5

Approximately what percent of all world production of goods and services is exported to other countries?

Accepted Answer

A)  10% 
B)  30% 
C)  50% 
D)  100% 
E)  90% 
A)  10% 
B)  30% 
C)  50% 
D)  100% 
E)  90%

The gravity model explains why

In the past half century, the developing countries have experienced major compositional shifts from exports of primary products (including agricultural and raw materials) to exports of manufactures. How might you explain this in terms of broad historical developments during this period?

Why does the gravity model work?

Approximately what percent of all world production of goods and services is exported to other countries?

Introduction

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

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

Optimum Currency Areas and the European Experience

Financial Globalization: Opportunity and Crisis

Developing Countries: Growth, Crisis, and Reform

Filters

Exam 2: World Trade: An Overview

The gravity model explains why

In the past half century, the developing countries have experienced major compositional shifts from exports of primary products (including agricultural and raw materials) to exports of manufactures. How might you explain this in terms of broad historical developments during this period?

Why does the gravity model work?

Approximately what percent of all world production of goods and services is exported to other countries?

Introduction

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

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

Optimum Currency Areas and the European Experience

Financial Globalization: Opportunity and Crisis

Developing Countries: Growth, Crisis, and Reform

Filters