International Economics 8th Edition

1) if the multiplier in a keynesian open economy is 2.0, this is consistent with which one of the following combinations of the marginal propensity to consume (mpc) and the marginal propensity to import (mpm)? (assume that there is no government sector.) a. mpc = 0.7, mpm = 0.2 b. mpc = 0.3,

1) during the price-specie-flow adjustment process to a trade imbalance, if demands for goods are inelastic, then, when the price level __________ in the country with the trade deficit, the value of that countrys exports will __________ as the price-specie-flow process takes place. a. falls; increase b. falls; decrease c. rises; increase d. rises; decrease Answer:

1) suppose that data are assembled on (1) research and development expenditures as a fraction of industry costs across u.s. industries (ranked from highest to lowest), and (2) the export success of u.s. industries (ranked from highest to lowest). if the product cycle theory is useful as an explanation for the

1) according to the labor theory of value, a. the value of labor is determined by its value in production b. the value of a good is determined by the amount of labor with which each unit of capital in an industry works c. the price of a good a compared to the

1) in the diagram above, what is the amount of tariff revenue collected by the government when the tariff is in place? a. $3 b. $6 c.. $18 d. $40 Answer: b Answer: b Answer: b suppose that, at the equilibrium level of income in a country, the country has a current account (x- m) deficit of 60.

1) two important assumptions contained in david humes price specie-flow adjustment mechanism are that a. countries are at full employment and the demands for traded goods are inelastic b. countries are at full employment and the price level of a country moves in inverse proportion to movements in the countrys money supply c.

1) an approximation to the real interest rate can be calculated by a. subtracting the nominal interest rate from the inflation rate b. subtracting the price level from the nominal interest rate c. dividing the nominal interest rate by the inflation rate d. subtracting the inflation rate from the nominal interest rate Answer: d Answer: d Answer:

1) Answer: Answer: Answer: 2) in the three-country world in question #19, which one of the following statements is true? a. posttrade prices (terms of trade) of 1 wheat:2.5 clothing (or 1 clothing:0.4 wheat) would give all the gains from trade to the united states b. posttrade prices (terms of trade) of 1

1) you are given the following classical-type table showing the output of 10 days labor in the production of each of the two commodities in each of the two countries. assume that the u.k. workers wage is 30 per day and that the fixed exchange rate is $2 = 1. if

1) in the imitation lag hypothesis, the length of time that elapses between when a new product is introduced by innovating firms in country i and when consumers in country ii decide that the new product is a good substitute for products in their current consumption bundle is known as the

1) the following diagram shows a fixed-quantity production-possibilities frontier, a community indifference curve and the associated autarky price line. suppose that this country is opened to trade from this initial situation where the dashed line indicates autarky prices [(px/py)autarky]. with this opening to trade, a. the country can gain from trade if

1) if tariffs are used in an attempt to improve country as balance of trade, and if exchange rates are flexible, the imposition of the tariffs will cause __________ in the value of as currency relative to other currencies and, as a consequence, as exports will __________. a. a decrease; decrease b.

1) the most recently successfully completed gatt/wto round or set of multilateral trade negotiations was the a. doha development agenda b. uruguay round c. tokyo round d. kennedy round Answer: b Answer: b Answer: b 2) in the following table of production possibilities for a country, there are __________ opportunity costs when moving to greater production of good x

1) if e is the current spot rate (units of home currency per unit of foreign currency), efwd is the current three-months forward rate, e(e) is the expected spot rate in three months, and xa is the expected rate of depreciation of the home currency in three months, then, in

1) suppose that the offshore assembly provisions (oap) of a country a are extended to a final good x that is imported as well as produced domestically. this action will most likely a. stimulate production in country a of components to final good x b. stimulate production in country a of final

1) in the large-country case, an export tax a. leads to an increase in the price of the good in the importing country b. leads to no change in the price of the good in the importing country c. is absorbed totally by the exporting country d. increases consumer welfare in both the exporting

1) when a country joins the international monetary fund, the country is assigned a quota, or subscription fee. at the present time, this quota is paid a. entirely in the countrys own currency b. 25 percent in gold and 75 percent in the country's own currency c. 25 percent in internationally acceptable currencies

1) in view of the theory of optimum currency areas, a country would be a good candidate for membership in such an area if it had a __________ degree of factor mobility with other potential member countries of the currency area and if the country were a relatively __________ economy. a.

1) which of the following is generally thought to haveestablished the highest tariffs in u.s. history? a. trade act of 1974 b. reciprocal trade agreements act of 1934 c. tariff act of 1930 (smoot-hawley tariff) d. general agreement on tariffs and trade Answer: c Answer: c Answer: c 2) a situation where a country announces a parity value

1) the situation where a country both exports and imports goods in the same product classification category is known as __________ trade, and such a trade situation for countries in the real world is likely to be __________ associated with country per capita income levels. a. intra-industry; positively b. intra-industry; negatively c. inter-industry; positively d.

1) a tariff placed upon a product in order to offset a foreign export subsidy is called a. an antidumping duty b. a countervailing duty c. a predatory duty d. a specific duty Answer: b Answer: b Answer: b 2) which one of the following has not been offered as a reason for increased wage inequality in the

1) if relatively capital-abundant country a opens trade with relatively labor-abundant country b and the trade takes place in accordance with the heckscher-ohlin theorem, what would be the consequence for factor prices (w/r) in the two countries? a. (w/r) rises in a and falls in b b. (w/r) rises in a and

1) in the following edgeworth box diagram for a countrys production, a. a movement from point s to point t involves an increase in the capital/labor ratio used in the production of good a b. if the ppf is plotted from the contract curve (or production efficiency locus), the production combination of goods

1) if the capital/labor ratio in import-competing industries in country a is $8,000 per worker and the capital/labor ratio in as export industries is $4,000 per worker, then country as leontief statistic is __________. a. 0.50 b. 0.67 c. 1.00 d. 2.00 Answer: d Answer: d Answer: d an increase in the long-run equilibrium level of income can

in a situation of stagflation, the use of aggregate demand-oriented macro policy to address the problem of the rising price level would, at least in the short run, __________ the price level and __________ the level of output in the economy. a. increase; increase 1) b. increase; decrease c. decrease; increase d. decrease; decrease Answer:

1) given the following information for industry x in country a, and assuming that input y is imported, that one unit of y is required for each one unit of x, and that country a is a small country: the effective tariff rate or effective rate of protection (erp) for industry x

1) given the following ricardo-type table shows the labor input required per unit of output in each of the two industries in each of the two countries: suppose that germany is a much larger country in terms of production and income than is the united kingdom. in this

1) given the following ricardo-type table shows the labor input required per unit of output in each of the two industries in each of the two countries: if the countries engage in trade at posttrade prices (terms of trade) of 1 shirt = 0.5 brandy, then a. france gets all

1) (this question draws appendix b material.) given the following diagram showing country as demand for imports schedule for good x (dimports), the supply of exports schedule to a from the rest of the world of good x(srow), and the supply of exports schedule to a from the rest of the world

1) suppose that a countrys unweighted-average (nominal) tariff rate (call it tu) and weighted-average (nominal) tariff rate (call it tw) are calculated both with and without the inclusion of prohibitive tariffs, and that the country does in fact have some prohibitive tariffs. in this situation, the tu that includes the