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 prohibitive tariffs
__________ the same as the tu that excludes the prohibitive tariffs, and the tw that
includes the prohibitive tariffs __________ the same as the tw that excludes the
prohibitive tariffs.
a. would not be; would not be
b. would not be; would be
c. would be; would not be
d. would be; would be
2) suppose that, in a real-world situation, a labor-abundant countrys tariffs and nontariff
barriers are levied relatively more heavily on labor-intensive goods than on
capital-intensive goods. in this situation, a leontief two-factor test would, other things
equal, be __________ the countrys adherence to the heckscher-ohlin trade pattern, in
comparison with a situation where trade barriers were absent.
a. biased toward confirming
b. biased against confirming
c. unbiased in its finding concerning
d. biased toward confirming, biased against confirming, or unbiased in its finding
concerning cannot be determined without more information
3) (this question pertains to material in appendix c.)
given the following information on the exports of country a in 2009, and assuming that
goods x and y are the only goods in country as trade sector:
country a’s index of intra-industry trade has a value of __________.
a. 0.4
b. 0.6
c. 1.0
d. 200
4) other things equal, which one of the following will cause an increase in the effective
rate of protection (erp) in the automobile industry?
a. a decrease in the nominal tariff rate on automobiles
b. an increase in the nominal tariff rates on imported inputs used in making automobiles
c. an increase in the world price of imported inputs used in making automobiles
d. a decrease in the nominal tariff rates on imported inputs used in making automobiles
5) if a countrys currency depreciates in the foreign exchange markets, the result will be
a shift of the aggregate demand curve __________; in addition, if intermediate goods
are an important component of the countrys imports, the short-run aggregate supply
curve __________.
a. to the left; also will shift to the left
b. to the left; will shift to the right
c. to the right; will shift to the left
d. to the right; also will shift to the right
6) in the large country case, the imposition of an import quota
a. will always produce a net loss for the imposing country
b. can result in a net gain for the importing country if the government employs an
auction quota system to allocate the restricted imports
c. will produce a net gain for the exporting country
d. will have no predictable effect on the exporting country
7) in the two-commodity context, you are given the following information pertaining to
country i in the year 2009 and the year 2014:
production of good x in 2009 = 200 units
production of good x in 2014 = 198 units
consumption of good x in 2009 = 160 units
consumption of good x in 2014 = 176 units
production of good y in 2009 = 100 units
production of good y in 2014 = 120 units
consumption of good y in 2009 = 120 units
consumption of good y in 2014 = 131 units
given the information above, it can be validly concluded that the type of production
effect that takes place between 2009 and 2014 in country i is __________ production
effect.
a. an ultra-antitrade (ua)
b. an antitrade (a)
c. a protrade (p)
d. an ultra-protrade (up)
8) if the supply curve of a good shifts increases and decreases cyclically along a
relatively inelastic (or steep) demand curve, then, in this market, the size of price
fluctuations will be __________ than the size of the quantity fluctuations.
a. relatively less
b. the same
c. relatively greater
d. relatively less or the same but not relatively greater
9) in the united states, in approximately the last 2-3 decades, the supply of
highly-skilled (hs) labor relative to less-highly-skilled (ls) labor has been rising. at the
same time, the ratio of wages of hs labor relative to ls labor has been __________, and,
therefore, the demand for hs labor relative to ls labor must have been increasing
__________ than the supply of hs labor relative to ls labor.
a. falling; less rapidly
b. falling; more rapidly
c. rising; less rapidly
d. rising; more rapidly
10) suppose that, during 2012, country a had exports of goods of $50, imports of goods
of $60, exports of services plus factor income receipts from abroad of $36, and imports
of services plus factor income payments abroad of $30. in addition, during 2007,
country a made $15 of unilateral transfers abroad and received no unilateral transfers
from abroad. given this information, country as balance on current account in 2007 was
a. a $19 deficit
b. a $10 deficit
c. a $4 deficit
d. a $6 surplus
11) given the following information for (small) country a concerning a good x:
a. the government revenue generated by the tariff is $800
b. the decrease in consumer surplus because of the tariff is $4,000
c. the increase in producer surplus because of the tariff is $3,200
d. the net welfare loss for a from the tariff is $600
12) a u.s. mutual fund that purchases packages of equities that contain stocks of
corporations both in the united states and in other countries worldwide is called
a. an international fund
b. a global fund
c. an emerging market fund
d. a regional fund