In 2010, _____ dollarized to escape from hyperinflation.
a. Zimbabwe
b. Argentina
c. El Salvador
d. Palau
Answer:
The figure given below represents the U.S. market for steel imports from Korea. The
Korean government provides an export subsidy of $25 per ton, and Korean firms use
the subsidy to reduce their export price to the United States to $375 per ton.
Calculate the change in national welfare in the United States when the Korean
government provides an export subsidy of $25 per ton?
a. + $375 million
b. ‘“ $3.75 billion
c. + $4.125 billion
d. ‘“$4.5 billion
Answer:
The figure given below shows the market for MP3 players in a small country. Dd and Sd
are the domestic demand and domestic supply curves of the MP3 players before the
imposition of the quota. (Sd + QQ) is the total available domestic supply curve after the
quota has been imposed. According to the figure, how much revenue can the
government expect to receive if the import licenses are auctioned?
0
a. $20 million
b. $50 million
c. $120 million
d. $170 million
Answer:
Following an expansion of the money supply, a government committed to maintaining a
fixed exchange rate must:
a. accept a surplus in its current account.
b. not use sterilized intervention.
c. increase its level of government expenditure and autonomous investments.
d. intervene in the foreign exchange market to sell foreign currency and buy domestic
currency.
Answer:
The factor-price-equalization theorem tells us that free trade between two countries
should result in:
a. all workers in the two countries earning the same wage rate.
b. all workers in the two countries having the same skill level.
c. all workers of the same skill level earning the same wage rate in the two countries.
d. all input prices being equal within each country.
Answer: