Question 1

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

Accepted Answer

A)  did not accomplish this with import-substituting industrialization. 
B)  did accomplish this with import-substituting industrialization. 
C)  tended to provide heavy protection to domestic industrial sectors. 
D)  favored industrial to agricultural or service sectors. 
E)  did so to the detriment of their nearest neighbors. 
A)  did not accomplish this with import-substituting industrialization. 
B)  did accomplish this with import-substituting industrialization. 
C)  tended to provide heavy protection to domestic industrial sectors. 
D)  favored industrial to agricultural or service sectors. 
E)  did so to the detriment of their nearest neighbors.

Question 2

-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...

Question 3

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 4

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.

Question 5

The "East Asian Miracle" is

Accepted Answer

A)  the ability of so many people to live in such small areas. 
B)  the fact that so many Influenza varieties originate from this region. 
C)  the fact that poor dualistic economies managed to escape the vicious circle of poverty. 
D)  the ability to maintain large positive trade balances with the U.S. 
E)  the advent of completely free labor mobility between east Asian countries. 
A)  the ability of so many people to live in such small areas. 
B)  the fact that so many Influenza varieties originate from this region. 
C)  the fact that poor dualistic economies managed to escape the vicious circle of poverty. 
D)  the ability to maintain large positive trade balances with the U.S. 
E)  the advent of completely free labor mobility between east Asian countries.

Question 6

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing), what trade policy might gain ABC of economic welfare?

Accepted Answer

Import-substitution

Question 7

China's recent experience supports the proposition that

Accepted Answer

A)  "economic miracles" are solely to be expected in small countries. 
B)  central planning and socialism can promote sustained economic growth. 
C)  a lessening of income disparities is a prerequisite for economic growth. 
D)  growth in a large country cannot be affected by its foreign sector. 
E)  policy changes can dramatically prompt export oriented growth. 
A)  "economic miracles" are solely to be expected in small countries. 
B)  central planning and socialism can promote sustained economic growth. 
C)  a lessening of income disparities is a prerequisite for economic growth. 
D)  growth in a large country cannot be affected by its foreign sector. 
E)  policy changes can dramatically prompt export oriented growth.

Question 8

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 9

The imperfect capital market justification for infant industry promotion

Accepted Answer

A)  assumes that new industries will tend to have low profits. 
B)  assumes that infant industries will soon mature. 
C)  assumes that infant industries will be in products of comparative advantage. 
D)  assumes that banks can allocate resources efficiently. 
E)  assumes that developing country will reward the donor country. 
A)  assumes that new industries will tend to have low profits. 
B)  assumes that infant industries will soon mature. 
C)  assumes that infant industries will be in products of comparative advantage. 
D)  assumes that banks can allocate resources efficiently. 
E)  assumes that developing country will reward the donor country.

Question 10

Which of the following could explain why the terms of trade of developing countries might deteriorate over time?

Accepted Answer

A)  Developing country exports consist mainly of manufactured goods. 
B)  Developing country exports consist mainly of primary products. 
C)  Commodity export prices are determined in highly competitive markets. 
D)  Commodity export prices are solely determined by developing countries. 
E)  Developing country exports are too diverse. 
A)  Developing country exports consist mainly of manufactured goods. 
B)  Developing country exports consist mainly of primary products. 
C)  Commodity export prices are determined in highly competitive markets. 
D)  Commodity export prices are solely determined by developing countries. 
E)  Developing country exports are too diverse.

Question 11

Sophisticated theoretical arguments supporting import-substitution policies include

Accepted Answer

A)  terms of trade effects. 
B)  scale economy arguments. 
C)  learning curve considerations. 
D)  the problem of appropriability. 
E)  domestic market failure arguments. 
A)  terms of trade effects. 
B)  scale economy arguments. 
C)  learning curve considerations. 
D)  the problem of appropriability. 
E)  domestic market failure arguments.

Question 12

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

Accepted Answer

Import substitution promotes that econom

Question 13

-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...

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

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

The remarkable success of the HPAEs proves that

Import substitution policies make use of

The "East Asian Miracle" is

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing), what trade policy might gain ABC of economic welfare?

China's recent experience supports the proposition that

The imperfect capital market justification for infant industry promotion

Which of the following could explain why the terms of trade of developing countries might deteriorate over time?

Sophisticated theoretical arguments supporting import-substitution policies include

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

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

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

Filters

Exam 11: Trade Policy in Developing Countries

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

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

The remarkable success of the HPAEs proves that

Import substitution policies make use of

The "East Asian Miracle" is

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing), what trade policy might gain ABC of economic welfare?

China's recent experience supports the proposition that

The imperfect capital market justification for infant industry promotion

Which of the following could explain why the terms of trade of developing countries might deteriorate over time?

Sophisticated theoretical arguments supporting import-substitution policies include

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

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

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

Filters