1) according to the theory of intra-industry trade, many manufactured goods undergo a
trade cycle in which the home country initially is an exporter and eventually becomes
an importer of a product.
a.true
b.false
2) the exchange of borrowing country debt for an ownership position in the borrowing
country is known as:
a.debt forgiveness
b.debt-for-debt swap
c.debt reduction
d.debt/equity swap
3) the j-curve effect implies that the price elasticity of demand for imports and exports
is more elastic in the short run than in the long run.
a.true
b.false
4) by widening the size of the domestic market, international trade permits companies
to take advantage of longer production runs and increasing efficiencies such as mass
production.
a.true
b.false
5) figure 14.2the us market for imported toyotas
in figure 14.2, d represents the us demand curve for toyotas and mc0 represents the
marginal cost of producing toyotas.assume that toyota behaves like a monopolist in the
us market.a shift in the marginal cost curve from mc0 to mc2 leads to
a.a complete pass-through ot the depreciation of the dollar
b.a complete pass-through of the appreciation of the dollar
c.a partial pass-through of the depreciation of the dollar
d.a partial pass-through of the appreciation of the dollar
6) with floating exchange rates, a country experiencing faster economic growth than its
trading partners find its currency’s exchange value appreciating.
a.true
b.false
7) refer to table 2.1. mutually advantageous trade will occur between the united states
and the united kingdom so long as one ton of steel trades for:
a.at least 1 television, but no more than 2 televisions
b.at least 2 televisions, but no more than 3 televisions
c.at least 3 televisions, but no more than 4 televisions
d.at least 4 televisions, but no more than 5 televisions
8) direct controls may take the form of
a.tariffs
b.export subsidies
c.export quotas
d.all of the above
9) the heckscher-ohlin theory asserts that relative differences in labor productivity
underlie comparative advantage.
a.true
b.false
10) referring to the balance-of-payments statement, an international transaction refers to
the exchange of goods, services, and assets between residents of one country and those
abroad.
a.true
b.false
11) should international transportation costs decrease, the effect on international trade
would include:
a.an increase in the volume of trade
b.a smaller gain from trade
c.a decline in the income of home producers
d.a decrease in the level of specialization in production.
12) among the codes of conduct addressed at the tokyo round of multilateral trade
negotiations were customs valuation, product standards, subsidies and countervailing
duties, government procurement policies, and import licensing procedures.
a.true
b.false
13) foreign direct investment would occur if mobile inc. of the united states acquired
sufficient common stock in a foreign oil company to assume voting control.
a.true
b.false