Question 1

In the present, most of the exports from China are

Accepted Answer

A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  overpriced by world market standards. 
A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  overpriced by world market standards. A

Question 2

According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is

Accepted Answer

A)  their cultural affinity. 
B)  the average weight/value of their traded goods. 
C)  their colonial-historical ties. 
D)  the distance between them. 
E)  the number of different product varieties produced by their industries. 
A)  their cultural affinity. 
B)  the average weight/value of their traded goods. 
C)  their colonial-historical ties. 
D)  the distance between them. 
E)  the number of different product varieties produced by their industries. D

Question 3

Since World War II, the relative importance of raw materials, including oil, in total world trade

Accepted Answer

A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend 
E)  increased slightly before dropping off. 
A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend 
E)  increased slightly before dropping off. C

Question 4

In the pre-World War I period, the U.S. exported mainly

Accepted Answer

A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  weapons. 
A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  weapons.

Question 5

In the pre-World War I period, the United Kingdom exported mainly

Accepted Answer

A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  livestock. 
A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  livestock.

Question 6

In the current Post-Industrial economy, international trade in services (including banking and financial services)

Accepted Answer

A)  dominates world trade. 
B)  does not exist. 
C)  is an increasingly important component of global trade. 
D)  is relatively stagnant. 
E)  far surpasses the predictions of economist Alan Blinder. 
A)  dominates world trade. 
B)  does not exist. 
C)  is an increasingly important component of global trade. 
D)  is relatively stagnant. 
E)  far surpasses the predictions of economist Alan Blinder.

Question 7

The gravity model offers a logical explanation for the fact that

Accepted Answer

A)  trade between Asia and the U.S. has grown faster than NAFTA trade. 
B)  trade in services has grown faster than trade in goods. 
C)  trade in manufactures has grown faster than in agricultural products. 
D)  Intra-European Union trade exceeds international trade by the European Union. 
E)  the U.S. trades more with Western Europe than it does with Canada. 
A)  trade between Asia and the U.S. has grown faster than NAFTA trade. 
B)  trade in services has grown faster than trade in goods. 
C)  trade in manufactures has grown faster than in agricultural products. 
D)  Intra-European Union trade exceeds international trade by the European Union. 
E)  the U.S. trades more with Western Europe than it does with Canada.

Question 8

Since World War II, the likelihood that the job of a new college graduate will be directly or indirectly affected by world trade

Accepted Answer

A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off. 
A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off.

Question 9

In the pre-World War I period, the United Kingdom imported mainly

Accepted Answer

A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  from the United States. 
A)  manufactured goods. 
B)  services. 
C)  primary products including agricultural. 
D)  technology intensive products. 
E)  from the United States.

Question 10

The gravity model explains why

Accepted Answer

A)  trade between Sweden and Germany exceeds that between Sweden and Spain. 
B)  countries with oil reserves tend to export oil. 
C)  capital rich countries export capital intensive products. 
D)  intra-industry trade is relatively more important than other forms of trade between neighboring countries. 
E)  European countries rely most often on natural resources. 
A)  trade between Sweden and Germany exceeds that between Sweden and Spain. 
B)  countries with oil reserves tend to export oil. 
C)  capital rich countries export capital intensive products. 
D)  intra-industry trade is relatively more important than other forms of trade between neighboring countries. 
E)  European countries rely most often on natural resources.

Question 11

Why does the gravity model work?

Accepted Answer

A)  Large economies became large because they were engaged in international trade. 
B)  Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment. 
C)  Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country. 
D)  Large economies tend to have large incomes and tend to spend more on imports. 
E)  Large economies tend to avoid trading with small economies. 
A)  Large economies became large because they were engaged in international trade. 
B)  Large economies have relatively large incomes, and hence spend more on government promotion of trade and investment. 
C)  Large economies have relatively larger areas which raises the probability that a productive activity will take place within the borders of that country. 
D)  Large economies tend to have large incomes and tend to spend more on imports. 
E)  Large economies tend to avoid trading with small economies.

Question 12

When comparing the composition of world trade in the early 20th century to the early 21st century, we find major compositional changes. These include a relative decline in trade in agricultural and primary-products (including raw materials). How would you explain this in terms of broad historical developments during this period?

Accepted Answer

The typical composition of world product

Question 13

The gravity model suggests that over time

Accepted Answer

A)  trade between neighboring countries will increase. 
B)  trade between all countries will increase. 
C)  world trade will eventually be swallowed by a black hole. 
D)  trade between Earth and other planets will become important. 
E)  the value of trade between two countries will be proportional to the product of the two countries' GDP. 
A)  trade between neighboring countries will increase. 
B)  trade between all countries will increase. 
C)  world trade will eventually be swallowed by a black hole. 
D)  trade between Earth and other planets will become important. 
E)  the value of trade between two countries will be proportional to the product of the two countries' GDP.

Question 14

The Neoclassical Heckscher-Ohlin model assumes that all producers of any industrial product has knowledge of, and may avail itself of the same production technology available to producers in any other country. Many have flagged this identical technology assumption as unrealistic. During the past half century, the relative importance of Multinational Corporations (MNCs) in world trade has steadily increased. How would this trend affect the realism of the "identical technology" assumption?

Accepted Answer

Noting that MNC plants tend to use more

Question 15

The Services sector has been steadily rising in relative importance in GDP of the United States, as well as elsewhere around the world. Since "services" have been identified as "non-tradable" (e.g., it is difficult to export haircuts), it may be argued that this trend will likely slow the rapid growth in international trade. Discuss.

Accepted Answer

This argument stands on questionable log

Question 16

We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries.

Accepted Answer

A)  This is explained by the gravity model, since these are all large countries. 
B)  This is explained by the gravity model, since these are all small countries. 
C)  This fails to be consistent with the gravity model, since these are small countries. 
D)  This fails to be consistent with the gravity model, since these are large countries. 
E)  This is explained by the gravity model, since they do not share borders. 
A)  This is explained by the gravity model, since these are all large countries. 
B)  This is explained by the gravity model, since these are all small countries. 
C)  This fails to be consistent with the gravity model, since these are small countries. 
D)  This fails to be consistent with the gravity model, since these are large countries. 
E)  This is explained by the gravity model, since they do not share borders.

Question 17

Since the period following World War II (the early 1950s), the proportion of most countries' production being used in some other country

Accepted Answer

A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off. 
A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off.

Question 18

Since World War II, the likelihood that foreign markets would gain importance to average exporters as a source of profits has

Accepted Answer

A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off. 
A)  remained constant. 
B)  increased. 
C)  decreased. 
D)  fluctuated widely with no clear trend. 
E)  increased slightly before dropping off.

Question 19

In general, which of the following do NOT tend to increase trade between two countries?

Accepted Answer

A)  linguistic and/or cultural affinity 
B)  historical ties 
C)  larger economies 
D)  mutual membership in preferential trade agreements 
E)  the existence of well controlled borders between countries 
A)  linguistic and/or cultural affinity 
B)  historical ties 
C)  larger economies 
D)  mutual membership in preferential trade agreements 
E)  the existence of well controlled borders between countries

Question 20

Which of the following does NOT explain the extent of trade between Ireland and the U.S.?

Accepted Answer

A)  historical ties 
B)  cultural Linguistic ties 
C)  Gravity Model 
D)  multinational corporations 
E)  large numbers of Irish-Americans 
A)  historical ties 
B)  cultural Linguistic ties 
C)  Gravity Model 
D)  multinational corporations 
E)  large numbers of Irish-Americans

In the present, most of the exports from China are

According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is

Since World War II, the relative importance of raw materials, including oil, in total world trade

In the pre-World War I period, the U.S. exported mainly

In the pre-World War I period, the United Kingdom exported mainly

In the current Post-Industrial economy, international trade in services (including banking and financial services)

The gravity model offers a logical explanation for the fact that

Since World War II, the likelihood that the job of a new college graduate will be directly or indirectly affected by world trade

In the pre-World War I period, the United Kingdom imported mainly

The gravity model explains why

Why does the gravity model work?

The gravity model suggests that over time

We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries.

Since the period following World War II (the early 1950s), the proportion of most countries' production being used in some other country

Since World War II, the likelihood that foreign markets would gain importance to average exporters as a source of profits has

In general, which of the following do NOT tend to increase trade between two countries?

Which of the following does NOT explain the extent of trade between Ireland and the U.S.?

Introduction

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

Trade Policy in Developing Countries

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 2: World Trade: an Overview

In the present, most of the exports from China are

According to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is

Since World War II, the relative importance of raw materials, including oil, in total world trade

In the pre-World War I period, the U.S. exported mainly

In the pre-World War I period, the United Kingdom exported mainly

In the current Post-Industrial economy, international trade in services (including banking and financial services)

The gravity model offers a logical explanation for the fact that

Since World War II, the likelihood that the job of a new college graduate will be directly or indirectly affected by world trade

In the pre-World War I period, the United Kingdom imported mainly

The gravity model explains why

Why does the gravity model work?

The gravity model suggests that over time

We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries.

Since the period following World War II (the early 1950s), the proportion of most countries' production being used in some other country

Since World War II, the likelihood that foreign markets would gain importance to average exporters as a source of profits has

In general, which of the following do NOT tend to increase trade between two countries?

Which of the following does NOT explain the extent of trade between Ireland and the U.S.?

Introduction

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

Trade Policy in Developing Countries

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