Question 1

Developing countries tend to export ______ because many of them have large endowments of ______.

Accepted Answer

A)  primary products,natural resources 
B)  primary products,capital 
C)  capital goods,advanced technology 
D)  capital goods,investment funds 
A)  primary products,natural resources 
B)  primary products,capital 
C)  capital goods,advanced technology 
D)  capital goods,investment funds

Question 2

The recent technological advances in oil production,such as hydraulic fracturing and horizontal drilling,have threatened the market share and profitability of the OPEC nations.

Accepted Answer

A) True 
 B)False

Question 3

American critics of the North American Free Trade Agreement (NAFTA) thought that it could

Accepted Answer

A)  cause American workers to migrate to Mexico to find jobs 
B)  cause U.S.companies to move to Mexico to benefit from lower labor costs 
C)  cause Mexican companies to move to the U.S.to benefit from higher labor productivity 
D)  cause Mexican companies to move to the U.S.to benefit from higher labor costs 
A)  cause American workers to migrate to Mexico to find jobs 
B)  cause U.S.companies to move to Mexico to benefit from lower labor costs 
C)  cause Mexican companies to move to the U.S.to benefit from higher labor productivity 
D)  cause Mexican companies to move to the U.S.to benefit from higher labor costs

Question 4

The developing nations are most of those in Africa,Asia,North America,and Western Europe.

Accepted Answer

A) True 
 B)False

Question 5

Suppose that Mexico and Canada form a free-trade area.The Mexicans then decrease refrigerator manufacturing and increase imports of refrigerators from Canada,while the Canadians decrease auto manufacturing and import more autos from Mexico.This is an example of trade creation.

Accepted Answer

A) True 
 B)False

Question 6

Concerning the price elasticities of supply and demand for commodities,empirical estimates suggest that most commodities have:

Accepted Answer

A)  Inelastic supply schedules and inelastic demand schedules 
B)  Inelastic supply schedules and elastic demand schedules 
C)  Elastic supply schedules and inelastic demand schedules 
D)  Elastic supply schedules and elastic demand schedules 
A)  Inelastic supply schedules and inelastic demand schedules 
B)  Inelastic supply schedules and elastic demand schedules 
C)  Elastic supply schedules and inelastic demand schedules 
D)  Elastic supply schedules and elastic demand schedules

Question 7

By joining NAFTA,the United States,Canada,and Mexico would find their short-run welfare decreasing due to the:

Accepted Answer

A)  Economies of scale effect 
B)  Business investment effect 
C)  Trade creation effect 
D)  Trade diversion effect 
A)  Economies of scale effect 
B)  Business investment effect 
C)  Trade creation effect 
D)  Trade diversion effect

Question 8

Recent trade patterns indicate that most of world trade occurs

Accepted Answer

A)  among advanced (industrial) countries 
B)  among developing countries 
C)  between regional trade blocks,such as NAFTA and the EU 
D)  between developing countries and advanced countries 
A)  among advanced (industrial) countries 
B)  among developing countries 
C)  between regional trade blocks,such as NAFTA and the EU 
D)  between developing countries and advanced countries

Question 9

Which device has been used by the International Wheat Agreement to stipulate the minimum prices at which importers will buy stipulated quantities from producers and the maximum prices at which producers will sell stipulated quantities to importers?

Accepted Answer

A)  Buffer stocks 
B)  Export controls 
C)  Multilateral contracts 
D)  Production controls 
A)  Buffer stocks 
B)  Export controls 
C)  Multilateral contracts 
D)  Production controls

Question 10

The diagram below illustrates the international tin market.Assume that the producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.2.Defending the Target Price in Face of Changing Supply Conditions
  
-Consider Figure 7.2.Suppose the supply of tin increases from S0 to S1.Under a buffer stock system,the buffer-stock manager could maintain the target price by:

Accepted Answer

A)  Purchasing 15 pounds of tin 
B)  Purchasing 30 pounds of tin 
C)  Selling 15 pounds of tin 
D)  Selling 30 pounds of tin 
A)  Purchasing 15 pounds of tin 
B)  Purchasing 30 pounds of tin 
C)  Selling 15 pounds of tin 
D)  Selling 30 pounds of tin

Question 11

During periods of weak demand,the Organization of Petroleum Countries has implemented production (export) quotas to ensure that excess oil supplies be kept off the market.

Accepted Answer

A) True 
 B)False

Question 12

Developing nations overwhelmingly acknowledge that they have benefited from international trade according to the principle of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 13

By the 1990s,China had departed from a capitalistic economy and shifted to a Soviet-type economy encompassing small-scale,labor-intensive industry.

Accepted Answer

A) True 
 B)False

Question 14

A customs union that results in a sizable amount of ______ would be beneficial to global welfare.

Accepted Answer

A)  trade creation 
B)  trade diversion 
C)  trade restrictions 
D)  trade diversification 
A)  trade creation 
B)  trade diversion 
C)  trade restrictions 
D)  trade diversification

Question 15

If the United Kingdom and Italy eliminate all tariffs on each other's goods and all restrictions to factor movements between them,and implement a uniform system of import restrictions against the rest of the world,these countries have formed a common market.

Accepted Answer

A) True 
 B)False

Question 16

Customs union theory reasons that the formation of a customs union will decrease members' real welfare when the:

Accepted Answer

A)  Trade diversion effect exceeds the trade creation effect 
B)  Trade production effect exceeds the trade consumption effect 
C)  Trade consumption effect exceeds the trade production effect 
D)  Trade creation effect exceeds the trade diversion effect 
A)  Trade diversion effect exceeds the trade creation effect 
B)  Trade production effect exceeds the trade consumption effect 
C)  Trade consumption effect exceeds the trade production effect 
D)  Trade creation effect exceeds the trade diversion effect

Question 17

Who were the losers in the U.S.as a result of NAFTA?

Accepted Answer

All labor intensive,lower wage and impor

Question 18

Negotiating the North American Free Trade Agreement was relatively easy since it involved meshing two large industrial countries with a developing country.

Accepted Answer

A) True 
 B)False

Question 19

The diagram below illustrates the international tin market.Assume that producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.1.Defending the Target Price in Face of Changing Demand Conditions
  
-Consider Figure 7.1.Suppose the demand for tin decreases from D0 to D2.Under a system of export quotas,the tin producers could maintain the target price by:

Accepted Answer

A)  Increasing the quantity of tin supplied by 15 pounds 
B)  Increasing the quantity of tin supplied by 30 pounds 
C)  Decreasing the quantity of tin supplied by 15 pounds 
D)  Decreasing the quantity of tin supplied by 30 pounds 
A)  Increasing the quantity of tin supplied by 15 pounds 
B)  Increasing the quantity of tin supplied by 30 pounds 
C)  Decreasing the quantity of tin supplied by 15 pounds 
D)  Decreasing the quantity of tin supplied by 30 pounds

Question 20

Figure 7.3.World Oil Market
  
-Consider Figure 7.3.Under competitive conditions,the quantity of oil produced equals:

Accepted Answer

A)  40 barrels 
B)  70 barrels 
C)  90 barrels 
D)  110 barrels 
A)  40 barrels 
B)  70 barrels 
C)  90 barrels 
D)  110 barrels

Developing countries tend to export because many of them have large endowments of .

The recent technological advances in oil production,such as hydraulic fracturing and horizontal drilling,have threatened the market share and profitability of the OPEC nations.

American critics of the North American Free Trade Agreement (NAFTA) thought that it could

The developing nations are most of those in Africa,Asia,North America,and Western Europe.

Suppose that Mexico and Canada form a free-trade area.The Mexicans then decrease refrigerator manufacturing and increase imports of refrigerators from Canada,while the Canadians decrease auto manufacturing and import more autos from Mexico.This is an example of trade creation.

Concerning the price elasticities of supply and demand for commodities,empirical estimates suggest that most commodities have:

By joining NAFTA,the United States,Canada,and Mexico would find their short-run welfare decreasing due to the:

Recent trade patterns indicate that most of world trade occurs

Which device has been used by the International Wheat Agreement to stipulate the minimum prices at which importers will buy stipulated quantities from producers and the maximum prices at which producers will sell stipulated quantities to importers?

During periods of weak demand,the Organization of Petroleum Countries has implemented production (export) quotas to ensure that excess oil supplies be kept off the market.

Developing nations overwhelmingly acknowledge that they have benefited from international trade according to the principle of comparative advantage.

By the 1990s,China had departed from a capitalistic economy and shifted to a Soviet-type economy encompassing small-scale,labor-intensive industry.

A customs union that results in a sizable amount of ______ would be beneficial to global welfare.

If the United Kingdom and Italy eliminate all tariffs on each other's goods and all restrictions to factor movements between them,and implement a uniform system of import restrictions against the rest of the world,these countries have formed a common market.

Customs union theory reasons that the formation of a customs union will decrease members' real welfare when the:

Who were the losers in the U.S.as a result of NAFTA?

Negotiating the North American Free Trade Agreement was relatively easy since it involved meshing two large industrial countries with a developing country.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under competitive conditions,the quantity of oil produced equals:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 7: Trade Policies for the Developing Nations

Developing countries tend to export ______ because many of them have large endowments of ______.

The recent technological advances in oil production,such as hydraulic fracturing and horizontal drilling,have threatened the market share and profitability of the OPEC nations.

American critics of the North American Free Trade Agreement (NAFTA) thought that it could

The developing nations are most of those in Africa,Asia,North America,and Western Europe.

Suppose that Mexico and Canada form a free-trade area.The Mexicans then decrease refrigerator manufacturing and increase imports of refrigerators from Canada,while the Canadians decrease auto manufacturing and import more autos from Mexico.This is an example of trade creation.

Concerning the price elasticities of supply and demand for commodities,empirical estimates suggest that most commodities have:

By joining NAFTA,the United States,Canada,and Mexico would find their short-run welfare decreasing due to the:

Recent trade patterns indicate that most of world trade occurs

Which device has been used by the International Wheat Agreement to stipulate the minimum prices at which importers will buy stipulated quantities from producers and the maximum prices at which producers will sell stipulated quantities to importers?

During periods of weak demand,the Organization of Petroleum Countries has implemented production (export) quotas to ensure that excess oil supplies be kept off the market.

Developing nations overwhelmingly acknowledge that they have benefited from international trade according to the principle of comparative advantage.

By the 1990s,China had departed from a capitalistic economy and shifted to a Soviet-type economy encompassing small-scale,labor-intensive industry.

A customs union that results in a sizable amount of ______ would be beneficial to global welfare.

If the United Kingdom and Italy eliminate all tariffs on each other's goods and all restrictions to factor movements between them,and implement a uniform system of import restrictions against the rest of the world,these countries have formed a common market.

Customs union theory reasons that the formation of a customs union will decrease members' real welfare when the:

Who were the losers in the U.S.as a result of NAFTA?

Negotiating the North American Free Trade Agreement was relatively easy since it involved meshing two large industrial countries with a developing country.

Figure 7.3.World Oil Market -Consider Figure 7.3.Under competitive conditions,the quantity of oil produced equals:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance-of-payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance-of-payments

Exchange Rate Systems and Currency Crises

Macroeconomic Policy in an Open-economy

International Banking: Reserves, Debt, and Risk

Filters

Developing countries tend to export because many of them have large endowments of .