Question 1

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

Question 2

It may be argued that theoretically,international capital movements

Accepted Answer

A)  tend to hurt labor in donor countries.
B)  increase future production in donor countries.
C)  tend to hurt the recipient countries.
D)  tend to hurt the donor countries.
E)  tend to hurt labor in recipient countries.F) C) and D)
G) A) and E)

Question 3

A country will be able to consume a combination of goods that is NOT attainable solely from domestic production if

Accepted Answer

A)  the country avoids international trade.
B)  the world terms of trade differ from its domestic relative costs.
C)  the country specializes in one product.
D)  the world terms of trade equal the domestic relative costs.
E)  the country's domestic production value equals world relative value.F) None of the above
G) A) and E)

Question 4

Suppose that a country experiences growth strongly biased toward its export,cloth,

Accepted Answer

A)  this will increase the price of cloth relative to the imported good.
B)  this will tend to worsen the country's terms of trade.
C)  this will tend to improve the country's terms of trade.
D)  this will tend to leave the country's terms of trade unchanged.
E)  this will tend to worsen the terms of trade for the country's trading partner.F) B) and E)
G) B) and D)

Question 5

The intertemporal tradeoff between present and future consumption is measured by the

Accepted Answer

A)  nominal interest rate.
B)  rate of economic growth.
C)  real interest rate.
D)  inflation rate.
E)  terms of trade.F) B) and C)
G) A) and D)

Question 6

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

Accepted Answer

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

Question 7

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

Question 8

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)  have no effect on its terms of trade.
B)  decrease its marginal propensity to consume.
C)  harm world terms of trade.
D)  harm its terms of trade.
E)  improve its terms of trade.F) A) and E)
G) All of the above

Question 9

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

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

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

Question 12

The intertemporal budget constraint is defined as:

Accepted Answer

A)  V = QP + QF/(1 + r) 
B)  V = DP + DF/(1 + r) 
C)  DF + DP/(1 + r) = QF + QP/(1 + r) 
D)  DP + DF(1 + r) = QP + QF(1 + r) 
E)  DP + DF/(1 + r) = QP + QF/(1 + r) F) A) and C)
G) A) and E)

Question 13

The meaning of "terms of trade" is

Accepted Answer

A)  the quantities of imports received in free trade.
B)  the price of a country's exports divided by the price of its imports.
C)  the price conditions bargained for in international markets.
D)  the tariffs in place between two trading countries.
E)  the amount of exports sold by a country.F) A) and E)
G) B) and E)

Question 14

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

Accepted Answer

A)  imports; decrease; imports; increase
B)  exports; decrease; exports; increase
C)  exports; increase; exports; decrease
D)  exports; increase; imports; decrease
E)  imports; increase; imports; decreaseF) D) and E)
G) None of the above

Question 15

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

Accepted Answer

A)  world relative quantity of cloth supplied and demanded will decrease.
B)  world relative quantity of food will increase.
C)  world relative quantity of cloth supplied will increase.
D)  world relative quantity of cloth demanded will decrease.
E)  world relative quantity of cloth supplied and demanded will increase.F) All of the above
G) None of the above

Question 16

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

Accepted Answer

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

Question 17

A fall in the real interest rate,all other things held constant,will cause a country's to .

Accepted Answer

A)  terms of trade; improve
B)  terms of trade; worsen
C)  current consumption: increase
D)  welfare level; improve
E)  current consumption: decreaseF) B) and D)
G) A) and C)

Question 18

International borrowing and lending may be interpreted as one form of

Accepted Answer

A)  trade in services.
B)  intertemporal trade.
C)  unrequited international transfers.
D)  intermediate trade.
E)  aid to offset trade advantages.F) None of the above
G) A) and D)

Question 19

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

Accepted Answer

A)  balanced growth.
B)  biased growth.
C)  imbalanced growth.
D)  immiserizing growth.
E)  unbiased growth.F) None of the above
G) A) and B)

Question 20

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)  increase its exports.
B)  decrease its marginal propensity to consume.
C)  improve its terms of trade.
D)  deteriorate its terms of trade.
E)  have no effect on its terms of trade.F) None of the above
G) B) and C)

Exam 6: The Standard Trade Model

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

Correct AnswerverifiedShow Answer

It may be argued that theoretically,international capital movements

Correct AnswerverifiedShow Answer

A country will be able to consume a combination of goods that is NOT attainable solely from domestic production if

Correct AnswerverifiedShow Answer

Suppose that a country experiences growth strongly biased toward its export,cloth,

Correct AnswerverifiedShow Answer

The intertemporal tradeoff between present and future consumption is measured by the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

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

Correct AnswerverifiedC

The intertemporal budget constraint is defined as:

Correct AnswerverifiedShow Answer

The meaning of "terms of trade" is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A fall in the real interest rate,all other things held constant,will cause a country's to .

Correct AnswerverifiedShow Answer

International borrowing and lending may be interpreted as one form of

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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