Question 1

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

Accepted Answer

A)  export promotion 
B)  import substitution 
C)  international commodity agreements 
D)  Infant Industry promotion 
E)  intra-industry trade practice 
A)  export promotion 
B)  import substitution 
C)  international commodity agreements 
D)  Infant Industry promotion 
E)  intra-industry trade practice

Question 2

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 3

-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...

Question 4

The disappointment with import-substitution policies is in part because

Accepted Answer

A)  of the rapid and continuous growth record of South American countries. 
B)  many countries pursuing this strategy experienced stagnation in their growth. 
C)  this policy is inconsistent with sophisticated economic growth models. 
D)  this policy tended to create world-class industrial competitors. 
E)  of the financial investment lost by the U.S. 
A)  of the rapid and continuous growth record of South American countries. 
B)  many countries pursuing this strategy experienced stagnation in their growth. 
C)  this policy is inconsistent with sophisticated economic growth models. 
D)  this policy tended to create world-class industrial competitors. 
E)  of the financial investment lost by the U.S.

Question 5

The infant industry argument was an important theoretical basis for

Accepted Answer

A)  neo-colonialist theory of international exploitation. 
B)  import-substituting industrialization. 
C)  historiography of the industrial revolution in Western Europe. 
D)  the East-Asian miracle. 
E)  the reduction of tariffs on Western Europe. 
A)  neo-colonialist theory of international exploitation. 
B)  import-substituting industrialization. 
C)  historiography of the industrial revolution in Western Europe. 
D)  the East-Asian miracle. 
E)  the reduction of tariffs on Western Europe.

Question 6

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 7

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 8

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 9

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 10

The consensus today is that import-substitution protectionist industrial policy has not served the developing countries' growth ambitions well. This fact proves that policies relying on export-driven growth are the "winning ticket" for these countries.

Accepted Answer

Although there are many who draw precise

Question 11

-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...

Question 12

Growth rates in Brazil and other Latin American countries have actually been slower since the trade liberalization of the late 1980s than they were during import-substituting industrialization

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 13

The "East Asian Miracle" of the "Four Tigers" in the 1960s was replicated by

Accepted Answer

A)  developing countries around the world. 
B)  other East Asian countries. 
C)  Sub Sahara African countries. 
D)  Industrialized countries. 
E)  Eastern European countries. 
A)  developing countries around the world. 
B)  other East Asian countries. 
C)  Sub Sahara African countries. 
D)  Industrialized countries. 
E)  Eastern European countries.

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

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 agriculture?

The disappointment with import-substitution policies is in part because

The infant industry argument was an important theoretical basis for

Sophisticated theoretical arguments supporting import-substitution policies include

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

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 consensus today is that import-substitution protectionist industrial policy has not served the developing countries' growth ambitions well. This fact proves that policies relying on export-driven growth are the "winning ticket" for these countries.

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

Growth rates in Brazil and other Latin American countries have actually been slower since the trade liberalization of the late 1980s than they were during import-substituting industrialization

The "East Asian Miracle" of the "Four Tigers" in the 1960s was replicated by

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

Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?

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 agriculture?

The disappointment with import-substitution policies is in part because

The infant industry argument was an important theoretical basis for

Sophisticated theoretical arguments supporting import-substitution policies include

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

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 consensus today is that import-substitution protectionist industrial policy has not served the developing countries' growth ambitions well. This fact proves that policies relying on export-driven growth are the "winning ticket" for these countries.

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

Growth rates in Brazil and other Latin American countries have actually been slower since the trade liberalization of the late 1980s than they were during import-substituting industrialization

The "East Asian Miracle" of the "Four Tigers" in the 1960s was replicated by

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