Deck 8: Growth and Development With International Trade

Question 1

Which of the following is not a characteristic of a developing country?

A)A high proportion of the labor force in agriculture
B)A high illiteracy rate
C)Low life expectancy
D)Low population growth rate

Answer 1

D

Question 2

Which of the following graphs reflects a balanced growth (the two axis represents two goods X and Y and the curves (I and II)represent the before and after growth position of the PPF)?

A)

B)

C)

D)

Answer 2

Question 3

Assume in base year 1990,the index for the volume of exports is equal to 100,and we find that,for the 2004 fiscal year,the US price index for exports has risen 3 percent,the price index for imports has fallen by 4 percent,and the index for the volume of exports is 95 in 2004.What is the value of the U.S.income terms of trade?

A)95.1
B)101.9
C)88.6
D)106.7

Answer 3

B

Question 4

Which of the following countries is characterized by rapid growth in gross domestic product in industrial production and manufactured exports?

A)Hong Kong
B)Korea
C)Singapore
D)All of these countries

Question 5

Endogenous growth theory:

A)Provides a convincing argument against international trade in that the lack of a single regulatory entity results in the trade of unsafe products for the consumer
B)Advocates international trade because of the resulting increase of economic growth and development of participating nations
C)Is disparaging of international trade for the negative effects experienced by larger nations involved
D)Advocates international growth as a way for larger nations to accelerate slowed growth relative to that of developing countries

Question 6

Which High Performance Asian Economies (HEPA)are labeled as the 4 Asian Tigers?

A)Hong Kong,Malaysia,Taiwan and Yemen
B)Hong Kong,Korea,Singapore and Taiwan
C)Taiwan,Pakistan,Taiwan and Hong Kong
D)Singapore,Korea,China and Hong Kong

Question 7

Assume in base year 1995,the net barter terms of trade is equal to 100,and we find that,for the 2004 fiscal year,the US price index for exports has risen 8 percent and the price index for imports has fallen by 4 percent.What is the value of the U.S.net barter terms of trade?

A)63.4
B)101.2
C)88.6
D)112.5

Question 8

Which of the following areas would have countries which are more likely to use trade primarily as a vent for agricultural surplus? Southeast Asia

A)Eastern Europe
B)North America
C)South America

Question 9

Which of the following was an empty and resource-rich land settled by the Europeans during the 1800s?

A)New Zealand
B)Argentina
C)Uruguay
D)All of these countries

Question 10

Which economist found that export instability was somewhat larger for developing nations than for developed nations during the postwar period?

A)Hans Singer
B)Alasdair MacBean
C)Alfred Marshall
D)Kenneth Arrow

Question 11

______________ are international attempts to stabilize and increase the prices and earnings of the primary exports of developing nations.

A)Farm equalization committees
B)Agricultural stabilization commissions
C)Marketing boards
D)International commodity agreements

Question 12

What type of international commodity agreement involves the purchase of the commodity when its price falls below an agreed minimum price,and the sale of the commodity when its price rises above the established maximum price?
E)Buffer stock
F)Export controls
G)Purchase contracts H)Marketing Board

Question 13

Equal rates of factor growth and/or technological progress in the production of two commodities is:

A)immiserizing growth
B)the central focus of endogenous growth theory
C)balanced growth
D)the engine of growth

Question 14

Assume in base year 1990,the net barter terms of trade is equal to 100,and we find that,for the 2004 fiscal year,the US price index for exports has fallen 7 percent and the price index for imports has risen by 5 percent.What is the value of the U.S.net barter terms of trade?

A)63.4
B)101.2
C)88.6
D)112.5

Question 15

When a nation's terms of trade deteriorates to the point where the nation is worse off after growth than before,the nation has experienced:

A)immiserizing growth
B)post trade stagnation
C)unbalanced growth
D)impeded growth

Question 16

_____________ is the view that exports were the leading sector propelling the economies of the recently settled regions into rapid growth and development during the 19^th century.

A)Endogenous growth theory
B)The engine of growth
C)Balanced growth theory
D)Immiserizing growth

Question 17

______________ could be a domestic attempt to stabilize export prices for individual producers of an agricultural commodity.

A)Farm equalization committees
B)Agricultural stabilization commissions
C)Marketing boards
D)International commodity agreements

Question 18

Assume in base year 1990,the index for the volume of exports is equal to 100,and we find that,for the 2004 fiscal year,the US price index for exports has fallen 6 percent,the price index for imports has risen by 9 percent,and the index for the volume of exports is 108 for 2004.What is the value of the U.S.income terms of trade?

A)93.1
B)89.7
C)88.6
D)63.4

Question 19

Which of the following long-term multilateral agreements stipulates the minimum price at which importing nations agree to buy and a maximum price at which exporting nations agree to sell specified amounts of the commodity?

A)Buffer stock
B)Export controls
C)Purchase contracts
D)Marketing Board

Question 20

What type of international commodity agreement seeks to regulate the quantity of the commodity exported by each nation?

A)Buffer stock
B)Export controls
C)Purchase contracts
D)Marketing Board

Question 21

Which device has the International Tin Agreement utilized as a way of stabilizing tin prices?

A)Multilateral contracts
B)Export subsidies
C)Buffer stocks
D)Export tariffs

Question 22

In 2008,what was the average per capita income of all developing economies?

A)$500 - $1000
B)$500 - $2,000
C)$3000 - $7000
D)$8,000 - $9,000

Question 23

The New International Economic Order called for which of the following?

A)The renegotiation of the international debt of developing countries and the reduction in interest payments.
B)The establishment of international commodity agreements.
C)Preferential access in developed nations' markets to all the manufactured exports of developing nations.
D)All of these options are correct.

Question 24

Which of the following is one of the three main advantages of an import-substitution industrialization strategy?

A)The market for the industrial product already exists,as evidenced by imports of the commodity,so that risks are reduced in setting up an industry to replace imports
B)It overcomes the smallness of the domestic market and allows a developing nation to take advantage of economies of scale
C)Production of manufactured goods for export requires and stimulates efficiency throughout the economy
D)The expansion of manufactured exports is not limited by the growth of the domestic market

Question 25

Which of the following is not one of the most serious problems facing developing countries today?

A)The conditions of stark poverty prevailing in many countries
B)The unsustainable foreign debt of some of the poorest developing countries
C)The remaining trade protectionism of developed countries against developing countries exports
D)New International Economic Order

Question 26

Which of the following is one of the advantages of export-oriented industrialization?

A)It overcomes the smallness of the domestic market and allows a developing nation to take advantage of economies of scale
B)Production of manufactured goods for export requires and stimulates efficiency throughout the economy
C)The expansion of manufactured exports is not limited by the growth of the domestic market
D)It is easier for developing nations to protect their domestic market against foreign competition

Question 27

At which international trade gathering was there a successful reduction in trade restrictions and protectionism,averting a revival of inward-looking policies in developing countries?

A)Kennedy Round
B)Doha Round
C)Uruguay Round
D)Tokyo Round

Question 28

Which of the following is one of the advantages of export-oriented industrialization?

A)It overcomes the smallness of the domestic market and allows a developing nation to take advantage of economies of scale
B)The market for the industrial product exists domestically,as evidenced by imports of the commodity,so that risks are reduced in setting up an industry to replace imports
C)It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower trade barriers against their manufactured exports
D)Foreign firms are induced to establish so-called tariff factories to overcome the tariff wall of developing nations

Question 29

Ghana established a marketing board in which of the following commodities following World War II?

A)Cocoa
B)Rice
C)Bananas
D)Iron ore

Question 30

International trade can contribute to the economic growth of today's developing nations in which of the following ways?

A)Trade can lead to the full utilization of otherwise underemployed domestic resources.
B)By expanding the size of the market,trade makes possible division of labor and economies of scale.
C)International trade is the vehicle for the transmission of new ideas,new technology,and new managerial and other skills.
D)All of these options are correct.

Question 31

Which of the following is not one of the three main disadvantages of an import-substitution industrialization strategy?

A)Domestic industries can grow accustomed to protection from foreign competition and have no incentive to become more efficient
B)Import substitution can lead to inefficient industries because of the smallness of the domestic market in many developing nations
C)After the simpler manufactured imports are replaced by domestic production,import substitution becomes more and more difficult and costly as more capital-intensive and technological advanced imports have to be replaced by domestic production
D)Unhappy domestic producers who will not like the tariff barriers in their respective industries.

Question 32

Which of the following is one of the disadvantages of export-oriented industrialization?

A)It may be very difficult for developing nations to set up export industries because of the competition from the more established and efficient industries in developed nations.
B)The expansion of manufactured exports is not limited by the growth of the domestic market.
C)Domestic industries can grow accustomed to protection from foreign competition and have no incentive to become more efficient.
D)It allows developing nations to take advantage of economies of scale.

Question 33

Which terms of trade concept emphasizes a nation's capacity to import?

A)Income terms of trade
B)Commodity terms of trade
C)Barter terms of trade
D)Price terms of trade

Question 34

As part of the deal with the IMF to renegotiate their debts after an inability to pay the interest on its foreign debt in 1982,Mexico was required to adopt which of the following measures?

A)Reduction of importation
B)Increase inflation to reduce the value of foreign debt
C)Increase domestic spending on programs aimed at bringing in the skilled workers needed to free them from the financial crisis
D)Export reduction

Question 35

Which of the following is one of the disadvantages of export-oriented industrialization?

A)It may be very difficult for developing nations to set up export industries because of the competition from the more established and efficient industries in developed nations
B)Domestic industries can grow accustomed to protection from foreign competition and have no incentive to become more efficient
C)Import substitution can lead to inefficient industries because of the smallness of the domestic market in many developing nations
D)Domestic industries can grow accustomed to protection from foreign competition and have no incentive to become more efficient

Question 36

For most developing countries:

A)productivity is high among domestic workers.
B)population growth and illiteracy rates are low.
C)savings and investment levels are high.
D)agricultural goods and raw material tend to make up much of domestic output.

Question 37

_______________ is the idea that exports of developing countries to developed countries cannot grow rapidly because of the protectionist policies of the developed countries.

A)Seeing the export glass half empty
B)Export pessimism
C)Import substitution
D)Export-led growth

Question 38

Which of the following is one of the three main disadvantages of an import-substitution industrialization strategy?

A)It may be very difficult for developing nations to set up export industries because of the competition from the more established and efficient industries in developed nations
B)Domestic industries can grow accustomed to protection from foreign competition and have no incentive to become more efficient
C)Developed nations often provide a high level of effective protection for their industries producing simple labor-intensive commodities in which developing nations already have or can soon acquire a comparative advantage
D)Foreign firms are induced to establish so-called tariff factories to overcome the tariff wall of developing nations.

Question 39

Which of the following is not one of the three main advantages of an import-substitution industrialization strategy?

A)The market for the industrial product already exists,as evidenced by imports of the commodity,so that risks are reduced in setting up an industry to replace imports
B)It is easier for developing nations to protect their domestic market against foreign competition than to force developed nations to lower trade barriers against their manufactured exports
C)Foreign firms are induced to establish so-called tariff factories to overcome the tariff wall of developing nations
D)It overcomes the smallness of the domestic market and allows a developing nation to take advantage of economies of scale

Question 40

Which of the following agreements was based on export controls?

A)The International Rice Agreement
B)The International Sugar Agreement
C)The International Cocoa Bean Agreement
D)The International Banana Agreement

Question 41

One of the most serious problems facing developing countries today is the lack of high paying corporate level positions,as this is the type of skilled labor needed to alleviate the poverty problem in these nations.

Question 42

Briefly discuss the three most serious problems facing developing countries today.

Question 43

The new international Economic Order called for the renegotiation of the international debt of developing countries and the reduction in interest payments.

Question 44

The International Wheat Agreement,signed in 1949,is still in operation today.

Question 45

During the 1950s,1960s,and 1970s,developing countries relied upon industrialization for faster technological progress.

Question 46

In the 1980s,high performance Asian economies (HPAEs)were also known as newly industrialized economies (NIEs).

Question 47

To this day,international trade remains as strong an engine of growth for regions of recent settlement as it was in the nineteenth century.

Question 48

What is Immiserizing Growth? Why is immiserizing growth seldom experienced in the real world?

Question 49

The NIEO is the set of demands made by developing nations as a group at the UN for the removal of alleged inequities in the operation of the present international economic system.

Question 50

If a nation's terms of trade increases from ½ to 1,and consumption increases from a lower indifference curve to a higher one,this nation is experiencing immiserizing growth.

Question 51

Export pessimism is the belief that a lack of protectionist policies towards developing countries will lead to a slowing of exports in developed ones.

Question 52

Although traditional trade theories suggest that developing countries should specialize in labor intensive commodities like,raw material,food,minerals,etc.,why do some developing countries believe that a pattern of specialization under the theory of comparative advantage relegated them to a subordinate position compared to the developed nations?

Question 53

The slowdown of the world economy during the 1980's and early 1990's gave industrial countries the ability to turn outward to address any internal problems of slow growth and unemployment.

Question 54

During the 1970s and 1980s,the total foreign debt that developing countries accumulated was in the range of $150 billion to $200 billion.