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Global Economics and International Economic Relations.d

Global Economics and International Economic Relations.d

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Вопросы и варианты

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Вопрос 1

According to the theory of comparative advantage, which of the following is not a reason why countries trade?

  1. Comparative advantage.
  2. Costs are higher in one country than in another.
  3. Prices are lower in one country than in another.
  4. Exports give a country a political advantage over other countries that export less.
Вопрос 2

Which of the following statements would a mercantilist not agree with?

  1. Imports are desirable.
  2. Trade is a zero-sum activity.
  3. The purpose of trade is to amass revenues from exports.
  4. A country can benefit by granting monopoly rights to individuals.
Вопрос 3

If all prices in one country (country A) are higher than all prices in another country (B) when compared at the wage rates that happen to prevail in the two countries, and if the countries share the same currency, then if the nominal wage rate in country B remains fixed

  1. The nominal wage rate in country A will have to fall.
  2. Unemployment must be higher in country B than in country A.
  3. The real wage in country A must be higher than in country B.
  4. Workers in country A must be less productive than workers in country B.
Вопрос 4

According to the theory of comparative advantage, a country will export a good only if

  1. It can produce it using less labor than other countries.
  2. Its productivity is higher in producing the good than the productivity of other countries in producing it.
  3. Its wage rate in producing the good is lower than in other countries.
  4. Its cost of producing the good, relative to other goods, is at least as low as in other countries.
Вопрос 5

According to the theory of comparative advantage, countries gain from trade because

  1. Trade makes firms behave more competitively, reducing their market power.
  2. All firms can take advantage of cheap labor.
  3. Output per worker in each firm increases.
  4. World output can rise when each country specializes in what its does relatively best.
Вопрос 6

If international trade takes place as a result of comparative advantage, it will cause which of the following effects in the participating countries?

  1. Inequality among households will be reduced.
  2. All individuals in each country will be better off.
  3. The average well-being of people in both countries will increase.
  4. Both countries will grow faster over time.
Вопрос 7

Scholars at MIT recently tested the theory of comparative advantage. One problem with doing this is that

  1. The theory was never meant to apply after the 19th century.
  2. One cannot observe productivity in industries that are not producing.
  3. Countries keep their data on international trade secret.
  4. The theory is only valid if the world really only produces two goods.
Вопрос 8

Bernhofen and Brown tested the theory of comparative advantage by looking at data from 19th century Japan. This allowed them to observe which of the following data that would not normally be available?

  1. Worker productivity across sectors.
  2. Wages of labor.
  3. Exports minus imports.
  4. Autarky prices.
Вопрос 9

Clyde Prestowitz, in his assigned reading, cites a study that measures various costs of US trade with China. Which of the following is not one of those costs?

  1. Unemployment compensation paid by government
  2. The income lost by workers who become unemployed
  3. Food stamps
  4. Lost tax receipts
Вопрос 10

In the Embargo Act mentioned in the Costinot and Rodriguez-Clare reading, the US banned trade with

  1. Britain and France
  2. Mexico and Canada
  3. Russia and China
  4. Germany and Austria
Вопрос 11

… is a group of countries agree to abolish all trade restrictions and barriers.

  1. Common market
  2. Economic Union
  3. Custom Union
  4. Free Trade Area
Вопрос 12

EU stands for …

  1. Export Union
  2. European Union
  3. EXIM Union
  4. Export Unit
Вопрос 13

The abbreviation SAARC stands for …

  1. South American Association for Regional Cooperation
  2. South African Association for Regional Cooperation
  3. South ASEAN Association for Regional Cooperation
  4. South Asian Association for Regional Cooperation
Вопрос 14

The full form of WTO is …

  1. World Tariff Organization
  2. World Trade Organization
  3. Western Trade Organization
  4. World Transport Organization
Вопрос 15

…was replaced by WTO on January 1, 1995.

  1. NAFTA
  2. IMF
  3. IRDB
  4. GATT
Вопрос 16

In International Trade, Full form of NAFTA is … .

  1. National American Free Trade Agreement
  2. North Asian Free Trade Agreement
  3. New Anti-Tariff Free Trade Agreement
  4. North American Free Trade Agreement
Вопрос 17

AFTA is … .

  1. ASEAN Free Trade Area
  2. American Free Trade Area
  3. Asian Free Trade Area
  4. Agreement for Free Trade Area
Вопрос 18

ASEAN stands for … .

  1. The Association of Southeast American Nations
  2. The Association of Southeast Asian Nations
  3. The Agreement of Southeast American Nations
  4. The Agreement of Southeast Asian Nations
Вопрос 19

…was established by a multilateral treaty of 23 countries in 1947.

  1. WTO
  2. UN
  3. GATT
  4. NAFTA
Вопрос 20

In International Trade, IMF stands for … .

  1. International Monetary Fund
  2. International Money Fund
  3. International Market Fund
  4. International Monetary Firm
Вопрос 21

The Heckscher-Ohlin theorem looks to … to explain trade flows.

  1. relative factor endowments
  2. the existence of trade barriers
  3. acquired comparative advantage
  4. the differences in preferences among consumers
Вопрос 22

The quantity and quality of … of a country are its factor endowments.

  1. imports and exports
  2. deficits and surpluses
  3. labor, land, and natural resources
  4. commodity money and fiat money
Вопрос 23

Identify ways to define factor abundance.

  1. Physical unit
  2. Complete specialization
  3. Autarky
  4. Relative factor price
Вопрос 24

Production possibility frontier skewed to the X-axis because of …

  1. industry X need more labour in their production
  2. industry X need more capital in their production
  3. country resources are more on Labour
  4. country resources are more on Capital
Вопрос 25

An autarky point is …

  1. absence of trade
  2. trade without protectionism
  3. point of incomplete specialization
  4. Relative factor price
Вопрос 26

The movement to a higher community indifferent curve because of …

  1. incomplete specialization and trading in both countries
  2. economies of scale
  3. product differentiation
  4. Relative factor price
Вопрос 27

Identify the assumption(s) of Heckscher Ohlin model

  1. Two countries, two commodities and two factor of production
  2. different technology in production
  3. commodities are produce under increasing return to scale
  4. all resources are fully employed
Вопрос 28

Heckscher Ohline model …

  1. explain how comparative advantage is based on differences in factor endowments across nations
  2. explain trade affects relative factor prices within and across nations
  3. explain why trade is likely to be only a small reason for higher skilled-unskilled wage inequalities
  4. explain trade based from differentiated product
Вопрос 29

According to the Heckscher-Ohlin theorem … countries should export … products.

  1. capital-intensive, capital-intensive
  2. capital-intensive, labor-intensive
  3. labor-intensive, capital-intensive
  4. all resources, fully employed
Вопрос 30

Through specialization and trade, consumers are generally made …

  1. better off
  2. worse off
  3. point of incomplete specialization
  4. Relative factor price
Вопрос 31

The foreign direct investment includes … .

  1. Intellectual properties
  2. Human resources
  3. Tangible goods
  4. Intangible goods
Вопрос 32

The three disputes of FDI are over … .

  1. Concern
  2. Interest
  3. Regard
  4. Hobby
Вопрос 33

The Treaty of Rome was signed in the year … .

  1. 1959
  2. 1957
  3. 1956
  4. 1955
Вопрос 34

When did Austria join the European Union?

  1. 1997
  2. 1993
  3. 1995
  4. 1999
Вопрос 35

For spreading information, the foreign policy decision-makers rely on … .

  1. Bureaucrats
  2. Politicians
  3. Media
  4. Public
Вопрос 36

More expansion of foreign direct investment can boost … .

  1. Money circulation
  2. Demand
  3. Employment
  4. Unemployment
Вопрос 37

How will the offer curve react when customers are heterogeneous?

  1. Zero quadrant
  2. Negative quadrant
  3. Optimum quadrant
  4. Positive quadrant
Вопрос 38

Which of the following are improved when capital and labour are moved internationally?

  1. Economic growth gains
  2. Capital gains
  3. Gains from income
  4. Gains from trade
Вопрос 39

Which industry will have a free entry?

  1. Mineral mining
  2. Cable television
  3. T-shirt silk screening
  4. Satellite radio
Вопрос 40

What is it called when a country is specialised in a particular good and then it trades the good with other countries?

  1. Agreement
  2. Interdependence
  3. Correlation
  4. Dependence
Вопрос 41

Foreign aid … ?

  1. has been used as an instrument of foreign policy by the U.S
  2. should be abolished until poverty is eliminated is our own society
  3. is what ultimately overthrowing communism
  4. Political independence
Вопрос 42

Which is NOT a theoretical perspective on international relations … ?

  1. globalism
  2. pluralism
  3. scientific democracy
  4. neorealism
Вопрос 43

Which is NOT a common objective of states?

  1. Physical survival
  2. Territorial integrity
  3. Political independence
  4. Cultural diversity
Вопрос 44

Before the Treaty of Westphalia (1648) political organization around the world had been … ?

  1. unilateral and generic
  2. universal and local
  3. empirical and patriotic
  4. uniform and multiform
Вопрос 45

Historically nations are impacted by … ?

  1. change in the distribution of power
  2. technological progress
  3. climactic changes from the ice age to global heating
  4. BOTH fluctuations in the distribution of power and technological progress
Вопрос 46

An import tariff is a tax or duty levied on … commodities.

  1. Imported
  2. Exported
  3. Transported
  4. Free Trade Tariff (FTT)
Вопрос 47

An … is a tax or duty levied on exported commodities.

  1. Import Tariff
  2. Export Tariff
  3. Transport Tariff
  4. Free Trade Tariff (FTT)
Вопрос 48

…refers to purchase of goods from a foreign country.

  1. Foreign Trade
  2. Export Trade
  3. Import Trade
  4. EXIM Trade
Вопрос 49

…is a fixed percentage on the value of the traded commodity.

  1. Anti dumping duty
  2. Specific tariff
  3. Ad Valorem tariff
  4. A compound tariff
Вопрос 50

In most countries, foreign trade represents a significant share of …

  1. EXIM
  2. FDI
  3. Income Per Capita
  4. GDP
Вопрос 51

The International Fisher equation states that...

  1. ...domestic inflation rates will tend to equal foreign inflation rates.
  2. ...domestic real interest rates will tend to equal foreign real interest rates.
  3. ...the expected exchange rate depreciation of the domestic currency is equal to the future inflation differential (foreign minus domestic inflation).
  4. ...the difference between the bid-ask spread for an exchange rate is equal to the future inflation differential (foreign minus domestic inflation).
Вопрос 52

To understand the current nominal exchange rate, we need to know all of the following except...

  1. ...the long-run value of the exchange rate.
  2. ...last period's nominal exchange rate.
  3. ...present and future expected domestic interest rates.
  4. ...present and future expected foreign interest rates.
Вопрос 53

Suppose the following bilateral spot exchange rates are being quoted for the Danish krone (DKK), the US dollar (US$) and the euro (€):   US$/€ = 1.5 DKK/€ = 7.0 DKK/$ = 5.0   If you start with 100€, the most you could end up with in a single round of triangular arbitrage would be...

  1. 93.33
  2. 98.66
  3. 103.25
  4. 107.14
Вопрос 54

(A) … interest rate parity involves (B) … domestic and foreign interest rates and the spot and the (C) … exchange rates.

  1. (A) Covered; (B) riskless; (C) expected future
  2. (A) Covered; (B) riskless; (C) forward
  3. (A) Uncovered; (B) future; (C) forward
  4. (A) Covered; (B) future; (C) forward
Вопрос 55

Over the long run the rate of depreciation of the nominal exchange rate between two countries is approximately equal to the difference in national … rates.

  1. real output growth
  2. real interest
  3. productivity growth
  4. inflation
Вопрос 56

Which of the following is not a special feature of the foreign exchange rate market?

  1. Prices of foreign currencies have spill-over effects on international trade
  2. Often, monetary authorities aim at stabilizing (or even fixing) the exchange rate
  3. Dynamics of the exchange rate have effects on the interest rate
  4. The supply-side quantity of the exchange rate market is virtually unlimited
Вопрос 57

Which statement about the uncovered parity condition is true?

  1. To rule out the possibility of arbitrage, interest differentials and expected appreciation have to be equal
  2. It will only hold as long as a risk premium is included
  3. Investors have to be risk neutral in order to buy uncovered foreign bonds
  4. Bonds from other countries are always associated with risk
Вопрос 58

Long-term exchange rate fluctuations tend to be (A) … than daily changes in absolute terms, but there are (B) … changes which are (C) … reversed.

  1. (A) smaller; (B) fewer; (C) abruptly
  2. (A) smaller; (B) more; (C) rarely
  3. (A) larger; (B) fewer; (C) abruptly
  4. (A) larger; (B) fewer; (C) rarely
Вопрос 59

Month-to-month changes in exchange rates accounts for (A) … of the monthly trade balances. Countries with persistent trade deficits tend to have (B) … currencies.

  1. (A) little; (B) depreciating
  2. (A) most; (B) appreciating
  3. (A) little; (B) appreciating
  4. (A) most; (B) depreciating
Вопрос 60

The nominal exchange rate is forward-looking. What does that mean for its current value?

  1. It depends equally on past and expected events.
  2. It is exclusively determined by current expectations about the future.
  3. It will slowly adjust to any expected future level.
  4. Only variables from future periods determine the current value.
Вопрос 61

Suppose Countries A and B use only labour as an input and produce only cloth and wheat. In A, a worker in a day could produce 2 units of cloth or 4 units of wheat. In B, a worker in a day could produce 3 units of cloth or 9 units of wheat. At present the countries do not trade. Which of the following statements is false?

  1. Country A has a comparative advantage in cloth.
  2. Country B has a comparative advantage in wheat.
  3. Country A has an absolute advantage in cloth.
  4. Country B has an absolute advantage in wheat.
Вопрос 62

Return to the countries in question 1. Suppose trade opens up. Which of the following statements is true?

  1. Country A will export cloth to B, and import wheat from B, and each country will be able to consume more of both products than before.
  2. Country A will export wheat to B, and import cloth from B, and each country will be able to consume more of both products than before.
  3. Country A will export cloth to B, and import wheat from B, but only country B will gain from the trade.
  4. Country A will export wheat to B, and import cloth from B, but only country B will gain from the trade.
Вопрос 63

Suppose Countries C and D use only labour as an input and produce only tables and tents. In A, a worker in a week could produce 4 tables or 2 tents. In B, a worker in a week could produce 6 tables. Initially the countries do not trade, and then trade opens up. Under which circumstances will country C export tables?

  1. Under no circumstances.
  2. If a worker in country D could produce fewer than 3 tents a week.
  3. If a worker in country D could produce 3 tents a week.
  4. If a worker in country D could produce more than 3 tents a week.
Вопрос 64

Suppose two countries E and F use many inputs. Country E exports tractors and imports televisions. Assuming there are no economies of scale, which of the following statements is true?

  1. If the countries did not trade, then E would have a lower opportunity cost for tractors.
  2. Even though there is trade, E has a lower opportunity cost for tractors.
  3. E is sure to produce no televisions while F is sure to produce no tractors.
  4. Neither country can consume at a point outside its production possibility frontier.
Вопрос 65

Which of the following statements is false?

  1. Two countries may benefit from trade, even if their production possibility frontiers have identical shapes, if preferences differ in the two countries.
  2. Two countries may benefit from trade, even if their production possibility frontiers have identical shapes, if industries have substantial economies of scale.
  3. When two countries benefit from the opening up of trade, all citizens in each country will benefit.
  4. Differences in the degree of human capital offer one reason why two countries may have production possibility frontiers that differ in shape.
Вопрос 66

Suppose a small country imposes a tariff on a good. Which of the following statements is false?

  1. Consumer surplus from the good will decrease.
  2. Producer surplus from the good will decrease.
  3. The quantity imported will fall.
  4. The deadweight loss will be less than the total fall in surplus.
Вопрос 67

Suppose a large country imposes a tariff on a good. Which of the following statements is false?

  1. The total consumer plus producer surplus decreases.
  2. The price for consumers rises from the pre-tariff situation by the amount of the tariff.
  3. If other countries do not retaliate, the country may be better off.
  4. If other countries do not retaliate, the country may be worse off.
Вопрос 68

Which of the following arguments for trade barriers offers potential benefits to consumers?

  1. To soften the fall of declining industries.
  2. To protect industries from competition from low wage countries.
  3. To protect industries from dumping.
  4. To nurture infant industries by protecting them from cheaper imports.
Вопрос 69

Two large countries currently impose tariffs against each other. Each country would be better off with free trade. Which of the following statements are true? Each country might think 'if the other country maintains its tariff, we will be better off maintaining our tariff.' Each country may think 'if the other country unilaterally abolishes its tariff, we may be better off maintaining our tariff.

  1. Both 1 and 2
  2. 1 only
  3. 2 only
  4. 1 and 2 partially correct
Вопрос 70

Which of the following statements is false?

  1. Over 150 countries belong to the World Trade Organisation.
  2. If a country joins a customs union, it may do less trade with non-members than it did previously.
  3. A single market requires the removal of barriers to the movement of labour.
  4. Members of a free trade area agree to have uniform tariffs on imports from non-members.
Вопрос 71

International trade contributes and increases the world …

  1. Population
  2. Inflation
  3. Economy
  4. Trade Barriers
Вопрос 72

The ratio of trade to GDP was as high as … in 1913.

  1. 22.1
  2. 11.2
  3. 26.3
  4. 33.2
Вопрос 73

Free international trade maximizes world output through … .

  1. Countries reducing various taxes imposed.
  2. Countries specializing in production of goods they are best suited for.
  3. Perfect competition between countries and other special regions
  4. The diluting the international business laws & conditions between countries.
Вопрос 74

Domestic company limits it’s operations to … political boundaries.

  1. International
  2. National
  3. Transnational
  4. Global
Вопрос 75

Trade between two or more than two countries is known as … .

  1. Internal Business
  2. External Trade
  3. International Trade
  4. Unilateral Trade
Вопрос 76

…refers to the tax imposed on imports.

  1. Imported Tax
  2. Tariffs
  3. Subsidies
  4. Import Quotas
Вопрос 77

… means selling the products at a price less than on going price in the market.

  1. Quota
  2. Tariff
  3. Subsidy
  4. Dumping
Вопрос 78

… is the oldest International Trade theory.

  1. Country Similarity Theory
  2. Theory of Absolute Cost advantage
  3. Product Life Cycle Theory
  4. Mercantilism Theory
Вопрос 79

A voluntary export restraint is the opposite form of … .

  1. Import quotas
  2. International tariffs
  3. Subsidies
  4. Dumping
Вопрос 80

The international trade between … is like a vast game of beggar my neighbor.

  1. Exporter & Importer
  2. Two Countries
  3. Two world wars
  4. Country’s allies and enemies