Question 1

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; harmF) A) and B)
G) B) and E)

Question 2

What is intertemporal comparative advantage?

Accepted Answer

Intertemporal comparative advantage aris...

Question 3

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.F) A) and B)
G) A) and C)

Question 4

If two countries with diminishing returns and different marginal rates of substitution between two products were to engage in trade, then

Accepted Answer

A)   the marginal rates of substitution of both would become equal.
B)   the shapes of their respective production possibility frontiers would change.
C)   the larger of the two countries would dominate their trade.
D)   the country with relatively elastic supplies would export more.
E)   the opportunity costs for the smaller country would increase.F) A) and E)
G) All of the above

Question 5

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

Accepted Answer

A)   this will have no effect on terms of trade for the country's trading partner.
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 worsen terms of trade for the country's trading partner.
E)   this will tend to improve terms of trade for the country's trading partner.F) B) and D)
G) A) and E)

Question 6

-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 7

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

Accepted Answer

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

Question 8

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.F) A) and B)
G) D) and E)

Exam 6: The Standard Trade Model

Correct Answer
verified
If point c is the production point with ...
View Answer

If two countries with diminishing returns and different marginal rates of substitution between two products were to engage in trade, then

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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 Answer
verified

What is intertemporal comparative advantage?

Correct Answer
verified
Intertemporal comparative advantage aris...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

Exam 6: The Standard Trade Model

Correct AnswerverifiedIf point c is the production point with ...View AnswerShow Answer

If two countries with diminishing returns and different marginal rates of substitution between two products were to engage in trade, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

What is intertemporal comparative advantage?

Correct AnswerverifiedIntertemporal comparative advantage aris...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
If point c is the production point with ...
View Answer

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Intertemporal comparative advantage aris...
View Answer

Correct Answer
verified

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

Correct Answer
verified