Question 1

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

Accepted Answer

A)  international commodity agreement 
B)  export promotion 
C)  multilateral contract 
D)  import substitution 
E)  export subsidies 
A)  international commodity agreement 
B)  export promotion 
C)  multilateral contract 
D)  import substitution 
E)  export subsidies D

Question 2

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. A

Question 3

The experience of sub-Saharan Africa,as compared to that of "Other Asia" (not including the HPAEs)supports the argument that

Accepted Answer

A)  high rates of protection tend to harm economic growth. 
B)  the poorer is the country the easier it is for it to "catch up" economically. 
C)  low rates of protection tend to promote economic growth. 
D)  free trade always best stimulates a developing country's economy. 
E)  neither trade liberalization nor import substitution is a foolproof strategy for economic development. 
A)  high rates of protection tend to harm economic growth. 
B)  the poorer is the country the easier it is for it to "catch up" economically. 
C)  low rates of protection tend to promote economic growth. 
D)  free trade always best stimulates a developing country's economy. 
E)  neither trade liberalization nor import substitution is a foolproof strategy for economic development. E

Question 4

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 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

Taiwan and South Korea are examples of developing nations that have recently pursued these industrialization policies

Accepted Answer

A)  import substitution. 
B)  export promotion. 
C)  commercial dumping. 
D)  multilateral contract. 
E)  trade embargoes. 
A)  import substitution. 
B)  export promotion. 
C)  commercial dumping. 
D)  multilateral contract. 
E)  trade embargoes.

Question 7

To help developing nations strengthen their international competitiveness,many industrial nations have granted tariff reductions to developing nations under the

Accepted Answer

A)  international commodity agreements program. 
B)  multilateral contract program. 
C)  generalized system of preferences program. 
D)  export led growth program. 
E)  import substitution policy. 
A)  international commodity agreements program. 
B)  multilateral contract program. 
C)  generalized system of preferences program. 
D)  export led growth program. 
E)  import substitution policy.

Question 8

The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

Accepted Answer

A)  proves that export promoting trade policy leads to relatively rapid economic growth. 
B)  proves that a free-trade orientation of trade policy results in rapid economic growth. 
C)  proves that exports help growth, whereas imports impede growth. 
D)  proves that trade policy is the most important policy area for promotion of economic development. 
E)  does not prove that trade liberalization always leads to rapid economic growth. 
A)  proves that export promoting trade policy leads to relatively rapid economic growth. 
B)  proves that a free-trade orientation of trade policy results in rapid economic growth. 
C)  proves that exports help growth, whereas imports impede growth. 
D)  proves that trade policy is the most important policy area for promotion of economic development. 
E)  does not prove that trade liberalization always leads to rapid economic growth.

Question 9

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 10

The United States,as it began its long and successful growth in the early 19th century,consciously promoted domestic production through such activities as tariffs,Clay's American System,and many direct subsidies to railroads,canal companies,farmers (free land)etc.Today we view this blatant example of large scale and extensive import-substitution industrialization as having been very successful.Comment on this.

Accepted Answer

This is an interesting point and emphasi

Question 11

The HPAE (High Performance Asian Economies)countries

Accepted Answer

A)  have all consistently supported free trade policies. 
B)  have all consistently maintained import-substitution policies. 
C)  have all consistently maintained non-biased efficient free capital markets. 
D)  have all maintained openness to international trade. 
E)  have all outperformed the U.S. 
A)  have all consistently supported free trade policies. 
B)  have all consistently maintained import-substitution policies. 
C)  have all consistently maintained non-biased efficient free capital markets. 
D)  have all maintained openness to international trade. 
E)  have all outperformed the U.S.

Question 12

In 2003,the per-capita income in China was roughly ________ of that in the U.S.

Accepted Answer

A)  one hundredth 
B)  one eighth 
C)  one half 
D)  the same as 
E)  one twentieth 
A)  one hundredth 
B)  one eighth 
C)  one half 
D)  the same as 
E)  one twentieth

Question 13

The infant industry argument calls for active government involvement

Accepted Answer

A)  only if the government forecasts are accurate. 
B)  only if some market failure can be identified. 
C)  only if the industry is not one already dominated by industrial countries. 
D)  only if the industry has a high value added. 
E)  only if the industry is independently able to earn high returns. 
A)  only if the government forecasts are accurate. 
B)  only if some market failure can be identified. 
C)  only if the industry is not one already dominated by industrial countries. 
D)  only if the industry has a high value added. 
E)  only if the industry is independently able to earn high returns.

Question 14

The growth successes of the high performance Asian economies

Accepted Answer

A)  supports the belief that economic development requires import substitution policies. 
B)  rejects the belief that export-oriented industrialization is likely to promote economic development. 
C)  rejects the belief that economic development requires import substitution policies. 
D)  suggests that free trade policies are required for successful economic development. 
E)  enforces United States' hesitation to trade with developing countries. 
A)  supports the belief that economic development requires import substitution policies. 
B)  rejects the belief that export-oriented industrialization is likely to promote economic development. 
C)  rejects the belief that economic development requires import substitution policies. 
D)  suggests that free trade policies are required for successful economic development. 
E)  enforces United States' hesitation to trade with developing countries.

Question 15

-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 workers...

Question 16

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 17

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Accepted Answer

A)  discouraging exports. 
B)  encouraging exports. 
C)  encouraging an efficient use of a country's resources. 
D)  generating large tariff revenues for the government. 
E)  creating competitive manufacturing sectors. 
A)  discouraging exports. 
B)  encouraging exports. 
C)  encouraging an efficient use of a country's resources. 
D)  generating large tariff revenues for the government. 
E)  creating competitive manufacturing sectors.

Question 18

The infant industry argument is that

Accepted Answer

A)  comparative advantage is irrelevant to economic growth. 
B)  developing countries have a comparative advantage in agricultural goods. 
C)  developing countries have a comparative advantage in manufacturing. 
D)  developing countries have a potential comparative advantage in manufacturing. 
E)  developing countries have no chance to compete with industrialized countries. 
A)  comparative advantage is irrelevant to economic growth. 
B)  developing countries have a comparative advantage in agricultural goods. 
C)  developing countries have a comparative advantage in manufacturing. 
D)  developing countries have a potential comparative advantage in manufacturing. 
E)  developing countries have no chance to compete with industrialized countries.

Question 19

The development of countries like South Korea has been supported by all of the following EXCEPT

Accepted Answer

A)  high domestic interest rates. 
B)  high domestic saving rates. 
C)  large endowments of human capital. 
D)  high levels of labor productivity. 
E)  reduced government regulation. 
A)  high domestic interest rates. 
B)  high domestic saving rates. 
C)  large endowments of human capital. 
D)  high levels of labor productivity. 
E)  reduced government regulation.

Question 20

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

Accepted Answer

The answer of  
-Refer to above figure.If OmL1 workers...

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

The imperfect capital market justification for infant industry promotion

The experience of sub-Saharan Africa,as compared to that of "Other Asia" (not including the HPAEs)supports the argument that

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.

The "East Asian Miracle" is

Taiwan and South Korea are examples of developing nations that have recently pursued these industrialization policies

To help developing nations strengthen their international competitiveness,many industrial nations have granted tariff reductions to developing nations under the

The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

Sophisticated theoretical arguments supporting import-substitution policies include

The HPAE (High Performance Asian Economies)countries

In 2003,the per-capita income in China was roughly ________ of that in the U.S.

The infant industry argument calls for active government involvement

The growth successes of the high performance Asian economies

-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

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

The infant industry argument is that

The development of countries like South Korea has been supported by all of the following EXCEPT

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

Introduction

National Income Accounting and the Balance of Payments

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

Filters

Exam 11: Trade Policy in Developing Countries

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

The imperfect capital market justification for infant industry promotion

The experience of sub-Saharan Africa,as compared to that of "Other Asia" (not including the HPAEs)supports the argument that

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.

The "East Asian Miracle" is

Taiwan and South Korea are examples of developing nations that have recently pursued these industrialization policies

To help developing nations strengthen their international competitiveness,many industrial nations have granted tariff reductions to developing nations under the

The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

Sophisticated theoretical arguments supporting import-substitution policies include

The HPAE (High Performance Asian Economies)countries

In 2003,the per-capita income in China was roughly ________ of that in the U.S.

The infant industry argument calls for active government involvement

The growth successes of the high performance Asian economies

-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

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

The infant industry argument is that

The development of countries like South Korea has been supported by all of the following EXCEPT

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

Introduction

National Income Accounting and the Balance of Payments

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

Filters