Question 1

The labor theory of value

Accepted Answer

A)  is what economists believe determines prices today. 
B)  says that wages must always be greater than prices. 
C)  says that the price of a good is determined by the amount of labor required to produce it. 
D)  All of the above. 
A)  is what economists believe determines prices today. 
B)  says that wages must always be greater than prices. 
C)  says that the price of a good is determined by the amount of labor required to produce it. 
D)  All of the above.

Question 2

Once trade begins, a country will tend to specialize completely in the production of its export good.

Accepted Answer

A) True 
 B)False

Question 3

Countries with low wages will always be able to export to countries with high wages.

Accepted Answer

A) True 
 B)False

Question 4

Mercantilism

Accepted Answer

A)  is the philosophy of free international trade. 
B)  was a system of export promotion and barriers to imports practiced by governments, especially in the 17th and 18th centuries. 
C)  was praised by Adam Smith in The Wealth of Nations. 
D)  Both A and C. 
A)  is the philosophy of free international trade. 
B)  was a system of export promotion and barriers to imports practiced by governments, especially in the 17th and 18th centuries. 
C)  was praised by Adam Smith in The Wealth of Nations. 
D)  Both A and C.

Question 5

Absolute advantage is determined by

Accepted Answer

A)  actual differences in labor productivity between countries. 
B)  relative differences in labor productivity between countries. 
C)  Both A and B. 
D)  Neither A nor B. 
A)  actual differences in labor productivity between countries. 
B)  relative differences in labor productivity between countries. 
C)  Both A and B. 
D)  Neither A nor B.

Question 6

Adam Smith was an American economist that published The Wealth of Nations, one of the most important books in the history of economic thought.

Accepted Answer

A) True 
 B)False

The labor theory of value

Once trade begins, a country will tend to specialize completely in the production of its export good.

Countries with low wages will always be able to export to countries with high wages.

Mercantilism

Absolute advantage is determined by

Adam Smith was an American economist that published The Wealth of Nations, one of the most important books in the history of economic thought.

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Heckscher-Ohlin Theory

Tests of Trade Models: the Leontief Paradox and Its After-math

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Arrangements

International Trade and Economic Growth

An Introduction to International Finance

The Balance of Payments

The Foreign-Exchange Market

Prices and Exchange Rates: Purchasing Power Parity

Exchange Rates, Interest Rates, and Interest Parity

Foreign-Exchange Risk, Forecasting, and International Investment

Basic Theories of the Balance of Payments

Exchange Rate Theories

Alternative International Monetary Standards

International Banking, Debt, and Risk

Open-Economy Macroeconomic Policy and Adjustment

Filters

Exam 3: The Classical Model of International Trade

The labor theory of value

Once trade begins, a country will tend to specialize completely in the production of its export good.

Countries with low wages will always be able to export to countries with high wages.

Mercantilism

Absolute advantage is determined by

Adam Smith was an American economist that published The Wealth of Nations, one of the most important books in the history of economic thought.

An Introduction to International Trade

Tools of Analysis for International Trade Models

The Heckscher-Ohlin Theory

Tests of Trade Models: the Leontief Paradox and Its After-math

Tariffs

Nontariff Barriers and Arguments for Protection

Commercial Policy: History and Practice

Preferential Trade Arrangements

International Trade and Economic Growth

An Introduction to International Finance

The Balance of Payments

The Foreign-Exchange Market

Prices and Exchange Rates: Purchasing Power Parity

Exchange Rates, Interest Rates, and Interest Parity

Foreign-Exchange Risk, Forecasting, and International Investment

Basic Theories of the Balance of Payments

Exchange Rate Theories

Alternative International Monetary Standards

International Banking, Debt, and Risk

Open-Economy Macroeconomic Policy and Adjustment

Filters