1) most developing countries have pollution-control laws and enforcement policies that
are more stringent than those of the major industrial countries.
a.true
b.false
2) the canadian dollar would depreciate on the foreign exchange market if:
a.canadian consumer tastes change in favor of goods produced domestically
b.the profitability of assets in canada rises relative to the profitability of assets abroad
c.canada experiences a disastrous wheat-crop failure, leading to imports of more wheat
d.canada realizes technological improvements in the production of manufactured goods,
leading to relatively low costs for canada
3) to the extent that domestic importing companies organize as a monopoly buyer, and
foreign exporting companies behave as competitive sellers, the importing companies
capture the revenue effect of a quota.
a.true
b.false
4) unilateral transfers refer to two-sided transactions, reflecting the movement of goods
and services in one direction with corresponding payments in the other direction.
a.true
b.false
5) rapid growth of production and employment is commonly associated with large or
growing trade surpluses and current account surpluses.
a.true
b.false
6) according to the j-curve effect, an appreciation of the yens exchange value has:
a.no impact on the japanese trade balance in the short run
b.no impact on the japanese trade balance in the long run
c.an immediate negative effect on the japanese trade balance
d.an immediate positive effect on the japanese trade balance
7) the so-called general arrangements to borrow provide a permanent increase in the
supply of international reserves.
a.true
b.false
8) assume that the united states imports chemicals from germany. trade theory predicts
that if the german government grants an export subsidy to its chemical firms, the overall
welfare of the united states will increase.
a.true
b.false
9) an import quota is a physical restriction on the quantity of goods that may be
imported during a specified time period.
a.true
b.false
10) in an open trading system, a country will import those commodities that it produces
at relatively low cost while exporting commodities that can be produced at relatively
high cost.
a.true
b.false
11) created by the international monetary fund, special drawing rights (sdrs) are
unconditional rights to draw currencies of other nations, thus enabling countries to
finance their current-account deficits.
a.true
b.false
12) if the swiss demand for dollars is inelastic, an appreciation of the dollar against the
franc will lead to a greater quantity of francs being supplied to the foreign exchange
market to obtain dollars.
a.true
b.false
13) if citibank quoted bid and offer rates for the swiss franc at $.4850/$.4854, the bank
would be prepared to buy, say, 1 million francs for $485,000 and sell them for
$485,400.
a.true
b.false
14) the implicit industrial policies of the u.s. government have included:
a.formulating industry-specific economic policies designed to promote national
champions
b.nationalizing basic industries such as steel and autos
c.encouraging cartelization of aircraft and aluminum manufacturers
d.improving the setting for industry such as communications and infrastructure
15) when exchange rates are fixed by central bankers, the need for international
reserves disappears.
a.true
b.false
16) empirical research indicates that the demand and supply schedules for most primary
products are relatively inelastic to changes in price.
a.true
b.false