Pol 124 A Reading Quizzes 2-19
In The Game of Trust, which strategy tends to win if the game is played repeatedly many times (e.g., 10 times)? A. Always cooperate B. Copycat C. Detective D. Grudger E. Always cheat
Answer: B.
In a country where farm workers and textile and apparel factory workers cooperate to oppose free trade, we can assume that: A. The country is likely to be land-scarce relative to its trade partners B. The country is likely to be scarce in low-skilled labor relative to its trade partners C. The country is likely to be capital-scarce relative to its trade partners D. It is likely difficult to re-purpose textile and apparel production machines to other purposes E. It is likely difficult for workers to train for new industries
Answer: B.
Some features of Bangladesh's economic performance in the past 20 years include ... A. an increasingly open economy, with lower tariff barriers than the South Asian average B. exports as a share of GDP has declined in the past ten years C. Bangladesh is less attractive to multinational corporations than Vietnam D. Bangladesh is less attractive to multinational corporations than Vietnam E. continued reliance on production of low-value garments such as T-shirts, trousers, sweaters, and shirts F. continued reliance on production of low-value garments such as T-shirts, trousers, sweaters, and shirts G. continued reliance on production of low-value garments such as T-shirts, trousers, sweaters, and shirts
Answer: B, C, E, G.
The Bill That United the Senate is best described as an example of ... A. the factor model. B. strategic trade policy C. infant industry protection D. the society-centered approach to trade policy
Answer: B.
The WTO reduces the impact of raw power on international trade relations because: A. it does not provide a dispute-settlement mechanism that allows governments to enforce common rules B. it brings the rule of law to bear in international trade relations C. it does not bring the rule of law to bear in international trade relations D. it does not reflect the interests of the most powerful political systems E. it promotes discriminatory international trade
Answer: B.
The logic of the collective action problem helps us understand why ... A. Consumers rather than producers dominate trade politics B. Governments rarely liberalize trade unilaterally C. Trade politics tend to favor liberalization D. Public radio is so successful in fundraising drives E. Governments tend to liberalize trade unilaterally
Answer: B.
The marginal rate of substitution is a consumption indifference curve that: A. typically slopes upwards B. tells us how much of one good the consumer is willing to give up to acquire an additional unit of the second good C. reflects the assumption of increasing marginal utility D. each additional good provides a greater increase of utility E. reflects the increasing aggregate utility of a country's consumption
Answer: B.
Tit-for-tat is an example of ... (Note: The Evolution of Trust game calls Tit-for-Tat "Copycat"): A. Third party enforcement B. Reciprocity strategy C. Enforcement problem D. Pareto improvement E. Prisoner's dilemma
Answer: B.
Which of the following statements are true of the collective action problem? A. Larger groups can more easily solve collective action problems because it is easier for large groups to monitor free-riders B. Smaller groups may be more successful in achieving their policy aims because of per-person transaction costs C. Larger groups can more easily solve collective action problems because the necessary contribution size is smaller per person D. Larger groups tend to be more successful in achieving their policy aims because they are larger collectively
Answer: B.
The fact that Cuba's economy began to expand soon after the Soviet Union collapsed is mentioned in the TED talk as evidence that trade is good for economic growth: A. True B. False
Answer: B. The answer was FALSE because the Cuban economy declined (not expanded) after the Soviet Union collapsed. Remember his joke, "After the Soviet Union collapsed, there was no longer any investment and trading between the two countries, as you can clearly see, Cuba's economy absolutely FIDEL DOWN."
In the new deal signed between the US and the EU, it was agreed that governments on each side would no longer be allowed to subsidize Boeing and Airbus. A. True B. False
Answer: B. False
Private capital markets are unlikely to finance infant industries if ... (check all that apply): A. The firm is expected to become efficient in the future primarily due to economies of scale B. The firm is not expected to become efficient in the future C. The firm is expected to become efficient in the future due primarily to economies of experience D. The private capital market is efficient E. The private capital market is inefficient
Answer: B, C, E.
For most of the past 30 years, most foreign direct investment has A. Flowed from advanced industrialized countries, to advanced industrialized countries B. Flowed from advanced industrialized countries, to developing countries C. Flowed from developing countries, to advanced industrialized countries D. Flowed from developing countries, to developing countries
A. Flowed from advanced industrialized countries, to advanced industrialized countries
Which of the following are examples of locational advantages? (Check all that apply) A. Large consumer markets that are expected to grow rapidly B. Lower cost of the factors of production used intensively in the production of a specific product C. Vertical integration so that firms can internalize their transactions for intermediate goods D. Presence of natural-resource deposits E. Large pools of savings that can be tapped for capital-intensive investments
A. Large consumer markets that are expected to grow rapidly B. Lower cost of the factors of production used intensively in the production of a specific product D. Presence of natural-resource deposits
Examples of positive externalities that can be transferred through FDI include (Check all that apply) A. Technology B. Crowded-out investment C. Pollution D. Managerial expertise E. Marketing networks
A. Technology D. Managerial expertise E. Marketing networks
Match the Term to the Definition: 1. A status quo in which at least one member of society can be made better off without making any other member of society worse off 2. A status quo in which no member of society can be made better off without making some other member of society worse off 3. An outcome in which none of the players has an incentive to change their strategy unilaterally 4. A strategy that enables a player to reward other players for cooperating and punish them for cheating. 5. A situation in which parties to an agreement cannot be certain that the other parties will comply with the terms of the agreement. 6. A strategy that is the best reply to all of the other player's strategies. A. Reciprocity Strategy B. Pareto Optimal C. Nash Equilibrium D. Pareto Suboptimal E. Dominant Strategy F. Enforcement Problem
Answer: 1. D-Pareto Suboptimal 2. B-Pareto Optimal 3. C- Nash Equilibrium 4. A-Reciprocity Strategy 5. F- Enforcement Problem 6. E- Dominant Strategy
According to the factor model, A. Land-owners are likely to benefit economically from and to support free trade in countries with low population density B. Business owners are likely to benefit economically from and to support free trade in advanced economy countries C. Workers are likely to benefit economically from and to support free trade in backward economy countries D. Workers are likely to benefit economically from and to support free trade in advanced economy countries E. Business owners are likely to benefit economically from and to support free trade in backward economy countries
Answer: A, B, C.
Three problems associated with ISI policies, particularly in Africa, included: A. Persistent budget deficits from government investments in productive capacity and subsidies for public services such as electricity, water, and transportation B. Low levels of exports C. Low levels of exports D. Low levels of exports E. Excess capacity in agriculture
Answer: A, B, C.
Which of the following are true of overvalued exchange rates? A. They make imports less expensive for domestic buyers B. They make exports more expensive for foreign buyers C. They make exports more expensive for foreign buyers D. They make exports less expensive for foreign buyers E. They make imports more expensive for domestic buyers
Answer: A, B, C.
According to strategic-trade theory, ... (check all that apply): A. Firms operating in oligopolistic markets can earn profits greater than could be earned in equally risk investments in other sectors of the economy B. Some industries are characterized by oligopolistic competition C. Markets are perfectly competitive D. There are cases in which newly-created firms will not be efficient initially but could be efficient when they become mature E. Diminishing marginal returns of capital means that large firms tend to be less efficient than small firms
Answer: A, B, D.
Landowners dominated politics prior to World War II in Latin America, Asia, and Africa ... (Check all that apply): A. Because the countries are land abundant (especially relative to capital), so they primarily export agricultural goods, which enriches the landowners B. Primarily through colonial structures in Asia C. Because the countries are land scarce, so landowners are able to demand high rents, which enriches the landowners D. Primarily through colonial structures in Latin America E. Primarily through colonial structures in Africa
Answer: A, B, E.
Structural adjustment policies included three of the following: A. Higher producer prices in agriculture B. Infant industry protection C. Trade liberalization D. Overvalued exchange rates E. Deregulation and privatization
Answer: A, C, E.
While ISI was creating imbalances in most developing countries by the early 1980s, several East Asian economies experienced dramatic economic success by implementing policies including three of the following: A. Export-oriented industrialization B. Laissez-faire policies C. Wholesale import liberalization D. easy import substitution industrialization E.Stable macroeconomic environments
Answer: A, D, E.
Which of the following are true statements about the Bangladesh T-Shirt Economy podcast? A. Jobs in t-shirt factories made the lives of women better off in many ways B. Jobs in t-shirt factories made the lives of women better off in many ways C. Jobs in t-shirt factories made the lives of women better off in many ways D. By getting into the T-shirt business, Bangladesh has brought a huge amount of people out of poverty E. Jobs in t-shirt factories made male farmers' lives worse off in many ways. F. Most workers in the t-shirt factories are women
Answer: A, D, F.
According to strategic-trade theory, the location of high-technology industries is primarily determined by ... (choose the best two answers): A. Economies of scale and experience B. High factor endowments in skilled labor C. High factor endowments in capital D. Timing of market entry E. High factor endowments in land
Answer: A, D.
A country with many veto players in the political system is likely to have more: A. Policy stability B. Policy stability
Answer: A.
According to the Trade Show podcast, one of the first laws passed by the United States Congress was a tariff: A. True B. False
Answer: A.
Autarky means: A. Absence of trade B. Absence of order C. Political rule by the few D. Political rule by one leader
Answer: A.
Cordell Hull argued that World War 2 was caused, in part, by the United States abandoning global economic leadership and free trade after World War 1: A. True B. False
Answer: A.
East Asian governments used industrial policies to: A. create incentives to export B. promote the export of skilled labor C. increase the cost of investment in targeted industries D. reduce protection on infant industries E. use credit to assist importers' input suppliers
Answer: A.
Governments, under WTO rules, cannot ban imports of a product on health or safety grounds unless a preponderance of scientific evidence indicates that the product is, in fact, harmful: A. True B. False
Answer: A.
If Argentina needs 4 workers to make a car and 8 workers to make a boat, and Brazil needs 10 workers to make a car and 10 workers to make a boat, and the countries do NOT trade, then the opportunity cost of a boat is: A. 2 cars in Argentina and 1 car in Brazil B. ½ car in Argentina and 1 car in Brazil C. 9/7 of a car in both Argentina and Brazil D. 9/7 of a car in both Argentina and Brazil E. 1/2 car in both Argentina and Brazil
Answer: A.
If England has a lot of capital relative to labor compared to the United States, and computers are capital-intensive and clothes are labor-intensive, then: A. England will have a comparative advantage in producing computers and the United States will have a comparative advantage in producing clothes B. The US will have a comparative advantage in producing computers and England will have a comparative advantage in producing clothes C. England will have a comparative advantage in producing both computers and clothes D. The US will have a comparative advantage in producing both computers and clothes
Answer: A.
In The Game of Trust tournament, which strategy tends to win if the game is played repeatedly few times (e.g., 3 times)? A. Always cheat B. Always cooperate C. Detective D. Copycat E. Grudger
Answer: A.
World trade has grown so rapidly over the last 60 years because: A. the WTO and GATT supported and encouraged such growth B. the world's economic output has grown more than trade C. as a consequence of greater wealth equality between rich and poor nations D. of the competition between the US and the USSR E. national economies becoming less connected
Answer: A.
According to Rodrik, at the start of the Industrial Revolution, the income gap between the richest and poorest regions in the world was 2:1; today the difference is 20:1, and the gap between the richest and poorest country is 80:1 A. True B. False
Answer: A. True
As reported in The Economist, as of December 2019, the WTO's appellate body can no longer resolve disputes because the United States has been blocking the appointment of judges: A. True B. False
Answer: A. True
Bangladesh's economy has averaged close to 6 percent annual growth in the past 20 years. A. True B. False
Answer: A. True
In the 1990s, Krugman estimated that trade had little effect on reducing workers wages - instead, his research indicated that almost all of the decline in unskilled labor wages was caused by technology. But by 2013, his research indicated that the sheer volume of trade with China had significantly increased the negative effect of trade on unskilled labor earnings: A. True B. False
Answer: A. True
The WTO appellate judges ruled that the US is violating WTO rules by banning clove-flavored cigarettes because US law still allows the sale of mint-flavored cigarettes: A. True B. False
Answer: A. True
According to the basic Ricardian model, which of the following are true? (Check all that apply): A. Trade leads to increased consumption opportunities in each country because of specialization B. Trade leads to increased consumption opportunities in each country because of comparative advantage C. Trade leads to increased consumption opportunities in the country with absolute advantage and reduced consumption opportunities in the country with absolute disadvantage D. Two countries with the same opportunity costs between products and a constant rate of product transformation can still benefit from trade
Answer: A. and B.
As a result of ISI policies, developing countries in the 1960s and 1970s ... (Check all that apply): A. experienced high rates of industrialization B. had rapid economic growth C. became increasingly dependent on agriculture as their manufacturing industries failed due to inefficiency D. had stagnant or negative economic growth rates in the 1960s and 1970s
Answer: A. and B.
If Argentina needs 4 workers to make a car and 8 workers to make a boat, and Brazil needs 10 workers to make a car and 10 workers to make a boat, and the countries DO trade, then ... (check all that apply): A. Argentina will export cars to Brazil B. Argentina will export boats to Brazil C. Brazil will export cars to Argentina D. Brazil will export boats to Argentina E. The countries will not trade
Answer: A. and D.
If England has a lot of capital relative to labor compared to the United States and the countries do trade, then (check all that apply): A. England will export capital-intensive goods to the US B. England will export labor-intensive goods to the US C. England will import capital-intensive goods from the US D. England will import labor-intensive goods from the US
Answer: A. and D.
Which two core principles stand at the base of the WTO? A. Nondiscrimination B. Market conservatism C. Political liberalism D. Market liberalism E. Preferential discrimination
Answer: A. and D.
A public good is defined by which two characteristics? (check all that apply): A. Non-rivalry B. Oversupply C. Excludability D. Undersupply E. Non-excludability
Answer: A. and E.
It is unclear whether inclusive institutions, such as democracy, leads to economic development or if economic development causes democratization: A. True B. False
Answer: A.True
According to Rodrik, two lessons from East Asian countries including China include: A. Deep integration into global financial markets and the WTO offers the best opportunities for dramatic economic growth B. Successful long-term economic growth is generally promoted when markets and private incentives play a large role in the economy C. Successful long-term economic growth is generally promoted when markets and private incentives play a large role in the economy D. Selectively applying tariffs, import quotas, and price controls can be compatible with or even facilitate long-term economic growth E. Globalization and diversification are not necessary for long-term dramatic economic growth
Answer: B and D.
If Argentina needs 4 workers to make a car and 8 workers to make a boat, and Brazil needs 10 workers to make a car and 10 workers to make a boat, then (check all that apply) NOTE: You might want to look at the glossary to clarify the difference between absolute and comparative advantage: A. Brazil has an absolute advantage in making boats B. Argentina has an absolute advantage in making boats C. Brazil has a comparative advantage in making boats D. Argentina has a comparative advantage in making boats E. Argentina has a comparative advantage in making cars
Answer: B, C, and E.
Which of the following are "strong states", according to the definition used by Oatley? (check all that apply): A. United States B. France C. Japan
Answer: B, C.
Three reasons for the global shift from structuralism to neoliberalism as the guiding philosophy for economic development include: A. ISI policies were unsuccessful in promoting industrialization in countries who pursued those policies B. An economic crisis in the 1980s forced indebted countries to reform, and the IMF and World Bank pushed neoliberal policies C. A handful of Latin American countries outperformed other developing countries D. A handful of East Asian countries outperformed other developing countries E. Many countries that pursued ISI policies experienced economic imbalances such as budget and trade deficits
Answer: B, D, E
The Group of 77 developing countries used the UN Conference on Trade and Development (UNCTAD) talks and GATT talks to pursue ... (Check all that apply): A. Liberalization of international commodity prices, to allow for the price of commodity imports to fall to more affordable levels B. Elimination of trade barriers on commodities in industrialized nations C. Preferential access for import of manufactured goods from developing countries into industrialized nations D. Financial transfers from advanced industrialized nations E. International commodity price stabilization by setting a floor for commodity prices to stop those prices from falling too low
Answer: B, C, D, E.
In a country where the textile firm owners and textile industry labor unions cooperate to oppose free trade in the textile sector and apparel sector, one can assume that: A. The country is likely to be land-scarce relative to its trade partners B. It is likely difficult to re-purpose textile production machines to other purposes C. The country is likely to be capital-scarce relative to its trade partners D. The country is likely to be scarce in low-skilled labor relative to its trade partners E. It is likely difficult for workers to train for new industries
Answer: B, D, E.
China's economic reform was based on the following three pillars: A. Deregulation of agricultural markets and private ownership of land B. Gradual withdrawal of state financial support for manufacturing enterprises C. Gradual withdrawal of state financial support for manufacturing enterprises D. Gradual withdrawal of state financial support for manufacturing enterprises E. Gradual withdrawal of state financial support for manufacturing enterprises
Answer: B, C, D.
According to The Economist article, A. nearly all American workers displaced by Chinese imports found another job. This supports the Factor Model. B. many American workers displaced by Chinese imports did not find another job. This supports the Sector Model. C. nearly all American workers displaced by Chinese imports found another job. This supports the Sector Model. D. many American workers displaced by Chinese imports did not find another job. This supports the Factor Model.
Answer: B.
According to the TED Talk - foreigners, not robots, took our jobs: A. True B. False
Answer: B.
The infant industry protection argument assumes that: (check all that apply): A. Diminishing marginal returns of capital means that large firms tend to be less efficient than small firms B. Tariffs can help firms in new industries by providing them with a guaranteed domestic market C. There are cases in which newly-created firms will not be efficient initially but could be efficient when they become mature D. Mature firms are less efficient than young firms because mature firms use outdated technologies E. Tariffs and other forms of protection can only make society worse off by preventing factors from moving out of low-return and into high-return industries
Answer: B. and C.
If a country that isn't trading is offered the option to start trading, then equilibrium production and consumption will be changed by a country's decision: A. to specialize in the production of one good in order to obtain more of another good in which it has a comparative advantage B. to specialize in the production of one good in which it has a comparative advantage in order to obtain more of another good in which it has a comparative disadvantage C. to specialize in the production of one good in which it has a comparative disadvantage in order to obtain less of another good in which it has a comparative advantage D. to avoid trade with another country with which it has a comparative disadvantage
Answer: B.
Which two of the following statements are true? A. The sector model predicts that political conflict will be between economic classes B. The factor model predicts that political conflict will be between economic classes C. The sector model predicts that political conflict will be between export-oriented and import-substituting industries D. Predictions from the factor model are more likely to be true than predictions from the sector model if factor mobility is low E. The factor model predicts that political conflict will be between export-oriented and import-substituting industries
Answer: B. and C.
Which of the following give countries more bargaining power in WTO trade talks? (CHECK ALL THAT APPLY): A. Commitment to talks demonstrated by forgoing alternatives such as regional trade agreements B. Patience C. Impatience D. An attractive alternative to a successful trade agreement E. Determination not to walk away from talks
Answer: B. and D.
After the WTO appellate body made its decision between Indonesia and the US, ... (CHECK ALL THAT APPLY): A. The US lifted its ban on flavored cigarettes B. The US and Indonesia reached a secret settlement. C. Indonesia raised tariffs on US imports of electronics and pharmaceuticals D. The WTO fined the US $42 million for every year it kept its ban on flavored cigarettes in place E. Indonesia began exporting cigarette-looking clove cigars to the US
Answer: B. and E.
Which of the following statements are true of the winners and losers from the US sugar policy? (Check all that Apply) A. American consumers benefit from cheaper candy prices B. Sugar beet farmers in Minnesota are protected from foreign competition C. American jobs in candy factories are protected from foreign competition D. Brazil sugar exporters are major winners from the US sugar policies E. Workers in sugar farms in Florida are protected from foreign competition
Answer: B. and E.
The following conditions must be met for cooperation to be achieved in a prisoner's dilemma scenario of trade negotiations (CHECK ALL THAT APPLY): A. Each government must have an attractive outside option B. An institution such as the WTO must act as a third party enforcer C. Governments must use reciprocity strategies to enforce the cooperation outcome D. Each government must sufficiently value future benefits E. The game must be played repeatedly by the same governments
Answer: C, D, E
"Non-discrimination" ensures that: A. each WTO member are required to lower tariffs with other WTO members B. each WTO member faces identical opportunities to trade with other non-WTO members C. each WTO member faces identical opportunities to trade with other WTO members D. each WTO member are required to raise tariffs with other non-WTO members. E. each WTO member faces preferential opportunities to trade with other WTO members
Answer: C.
A country's trade policy ideal point usually follow the rule of: A. Protecting comparatively advantaged sectors and protecting comparatively disadvantaged sectors B. Liberalizing comparatively advantaged sectors and liberalizing comparatively disadvantaged sectors C. Liberalizing comparatively advantaged sectors and protecting comparatively disadvantaged sectors D. Protecting comparatively advantaged sectors and liberalizing comparatively disadvantaged sectors
Answer: C.
Brazil was able to get the United States to compensate them for unfair cotton subsidies by: A. Threatening to raise tariffs on US products such as cotton, software, and pharmaceuticals; appeals to the WTO were unhelpful because the US ignored WTO decisions B. Making political donations to US legislators C. Appealing to the WTO, and threatening to raise tariffs on US products such as software and pharmaceuticals D. Appealing to the WTO, and the WTO fined the United States E. Appealing to the WTO, and raising tariffs on US cotton
Answer: C.
In secondary ISI, emphasis shifts from: A. the manufacture of simple consumer goods for domestic consumption to manufacture of simple consumer goods for export B. the manufacture of consumer durable goods to intermediate exports C. the manufacture of simple consumer goods to consumer durable goods and intermediate inputs D. the manufacture of simple consumer goods for exports to the import of cheaper consumer durable goods
Answer: C.
A Hegemon is a country that: A. produces a disproportionately small share of the world's output because it trails in the development of new technologies B. are usually unwilling to contribute their fair share of the costs of the development of new technologies C. produces a disproportionately small share of the world's output but leads in the development of new technologies D. produces a disproportionately large share of the world's output and leads in the development of new technologies E. produces a disproportionately large share of the world's output but trails in the development of new technologies
Answer: D.
According to the "chicken tax" in the podcast ... A. China put a tariff on chickens, and the US responded with a tariff on imported trucks B. The US put a tariff on imported cars, and China responded with a tariff on imported chicken parts C. Germany put a tariff on imported cars, and the US responded with a tariff on imported chickens D. Germany put a tariffs on imported chickens, and the US responded with a tax on imported trucks
Answer: D.
In theory, countries with a majoritarian electoral system, compared to countries with PR electoral systems, are predicted to: A. Have lower tariffs, because political parties will appeal to large groups such as consumers B. Have higher tariffs, because political parties will appeal to large groups such as labor C. Have higher tariffs, because political parties will appeal to large groups such as farmers D. Have higher tariffs, because interest groups such as sugar growers or textile workers will capture legislators and press for protection E. Have lower tariffs, because interest groups such as automobile manufacturers or corn farmers will capture legislators and press for access to foreign markets
Answer: D.
India developed a manufacturing industry in the 1930s because A. India had a comparative advantage in manufacturing because of its relative abundance in skilled labor relative to trade partners B. India had a comparative advantage in manufacturing because of its relative abundance in skilled labor relative to trade partners C. When India left the British Empire after World War 1, a nationalist government was committed to self-reliance D. Markets for Indian exports constricted, forcing Indians to produce their own manufactures rather than import cheaper manufactures from abroad E. Markets for Indian exports expanded, enabling export revenues to be invested in capital accumulation
Answer: D.
When firms earn a substantial share of their revenues from ______, they have strong incentives to integrate vertically (Check all that apply) A.Intangible assets, such as railways that have been built from a particular location to a particular port B. Intangible assets, such as know-how among a set of employees C. Specific assets, such as know-how among a set of employees D. Specific assets, such as natural resources E. Specific assets, such as factories that manufacture component parts
D. Specific assets, such as natural resources E. Specific assets, such as factories that manufacture component parts
Policies to promote the development of infant industries are known as: A. Economic policy B. Protectionist policy C. Development policy D. Industrial policy E. Trade Policy
Answer: D.
The Hecksher-Ohlin trade model argues that: A. developed countries have the same basic factor endowments B. developed countries have the same comparative advantages C. developed countries have a lot of capital but little labor D. comparative advantage arises from differences in factor endowments E. comparative advantage arises from similarities in factor endowments
Answer: D.
The claim that developing countries face a continuous decline in their terms of trade: A. has been confirmed by most recent research according to Oatley. B. cannot be tested because the hypothesis is too generalized according to Oatley C. did not influence trade and development policies of developing countries according to Oatley D. has been disputed by most recent research according to Oatley. E. has been disputed by most recent research according to Oatley.
Answer: D.
According to the prisoner's dilemma view of trade bargaining, the Group of 20's preference ordering is as follows: A. Best option is both sides liberalize, then Group 20 liberalizes and EU protects, then both sides protect, then Group 20 protects and EU liberalizes B. Best option is both sides liberalize, then Group 20 protects and EU liberalizes, then Group 20 liberalizes and EU protects, then both sides protect C. None of the above D. Best option is Group 20 protects and EU liberalizes, then both sides liberalize, then Group 20 liberalizes and EU protects, then both sides protect E. Best option is Group 20 protects and EU liberalizes, then both sides liberalize, then both sides protect, then Group 20 liberalizes and EU protects
Answer: E.
Import substitution industrialization (ISI) was based on the strategy of: A. substituting previously exported simple consumer goods with newly domestically produced ones B. substituting previously exported advanced consumer goods with newly domestically produced advanced agricultural ones C. substituting previously imported advanced consumer goods with newly domestically produced simple ones D. substituting previously imported agricultural goods with newly domestically produced manufacturing ones E. substituting previously imported simple consumer goods with newly domestically produced ones
Answer: E.
The history of hegemonic transitions provides some support that: A. world trade has floundered during periods of hegemonic leadership and flourished during periods without it B. The European Union could reconstruct the world economy in the coming decades because China will not have the resources to do so C. the United States reconstructed the world economy after WW II even though it didn't have resources to do so D. the British failed to reconstruct the world economy after WW II even though it had the resources to do so E. world trade has flourished during periods of hegemonic leadership and floundered during periods without it
Answer: E.
The status quo tariff policies before the Doha Round of trade bargaining, according to Oatley, is: A. Low tariffs in developing countries on agricultural products and on manufactured goods. B. High tariffs in developing countries on agricultural products and on manufactured goods. C. High tariffs in the advanced industrialized countries on manufactured products and high tariffs in developing countries on agricultural goods. D. Low tariffs in the advanced industrialized countries on agricultural products and low tariffs in developing countries on manufactured goods. E. High tariffs in the advanced industrialized countries on agricultural products and high tariffs in developing countries on manufactured goods.
Answer: E.
According to Rodrik, the average rich person (top 10% of income distribution) in a poor country (bottom 10% of countries) earns more money than the average poor person (bottom 10% of income distribution) in a rich country (top 10% of countries): A. True B. False
Answer: False
In the first century of US history, the North was pro-free trade and the South was protectionist: A. True B. False
Answer: False
Which of the following are often included in Import Substitution Industrialization policies? (Check all that apply) A. Government investment in manufacturing enterprises B. Taxation of agricultural exports C. Taxation on manufactured imports D. Government control of agricultural export boards E. Government control of foreign exchange to facilitate import of capital goods
Answers: A, B, C, D, E
The CEO of Unilever said that COVID-19 has made it difficult for him to manage his international business because he can't fly around to communicate with his underlings around the world. A.True B. False
B. False
Cost advantages that provide incentives for horizontal integration often arise when ______ are the most important source of a firm's revenue A. Specific assets B. Intangible assets C. Liquid assets D. Positive externalities E. Natural resources
B. Intangible assets
Match the outcomes of different levels of miscommunication in a repeated Game of Trust. 1. If the level of miscommunication is High ... 2. If the level of miscommunication is Low ... 3. If there is no chance of miscommunication ... A. It's best to always cheat B. Copycat is the best strategy C. It pays to be more forgiving
1. A. 2. C. 3. B.
According to Acemoglu and Robinson, 1. Inclusive Institutions: 2. Extractive Institutions: A. Allocate power to a narrow ruling elite, leading to corruption and poor long-term economic growth B. Such as rule of law and property rights tend to promote economic growth over time
1. B. 2. A.
Match the term to the definition: 1. Exports are almost fully accounted for by one product 2. Export-oriented agricultural sectors that have few linkages to other parts of the local economy 3. In an economy in which few people earn a money wage, no single manufacturing firm can sell its products unless other manufacturing activities start simultaneously 4. Owners of manufacturing firms in one industry will not invest to increase production unless they are certain owners of manufacturing firms in interdependent industries will also increase production 5. Production of one good increases demand in industries that support components for that industry A. Pecuniary External Economies Coordination Problem B. Backward Linkages C. Enclave Agriculture D. Complimentary Demand Coordination Problem E. Mono-exporter
1. E. Mono-Exporter 2. C. Enclave Agriculture 3. D. Complimentary Demand Coordination Problem 4. A. Pecuniary External Economies Coordination Problem 5. B. Backward Linkages
According to the structuralist Singer-Prebisch theory, A. Developing countries' terms of trade improve over time, as periphery countries spend an increasingly larger share of their income on manufactured goods, which increases demand from local manufacturing firms B. Developing countries' terms of trade deteriorate over time, as primary commodity prices fall relative to manufactured goods prices C. Developing countries' terms of trade deteriorate over time, as periphery countries spend an increasingly smaller share of their income on manufactured goods, which reduces demand from local manufacturing firms D. Developing countries' terms of trade deteriorates over time, as core countries spend an increasingly larger share of their income on commodities from developing countries, which increases export income for developing countries but creates disincentives for developing countries to industrialize E. Developing count
Answer: B.
Comparative advantage means: A. One country can produce a product with fewer worker-hours than another country B. One country can produce a product at a lower opportunity cost (in terms of other products foregone) than another country
Answer: B.
Does the coalition in support of tire tariffs comply with the factor model or the sector model? A. The factor model, which argues that factors are immobile across sectors B. The sector model, which argues that factors are immobile across sectors C. The sector model, which argues that factors are immobile across sectors D. The sector model, which argues that factors are mobile across sectors
Answer: B.
Which of the following is true, according to Oatley? A. The state-based approach assumes that protectionism reduces social welfare and that national policy reflects the goals of national policy makers B. The society-based approach assumes that under certain conditions trade protection can raise social welfare and that national policy reflects the balance of power between competing interest groups C. The society-based approach assumes that protectionism reduces social welfare and that national policy reflects the balance of power between competing interest groups D. The society-based approach assumes that protectionism reduces social welfare and that national policy reflects the goals of national policy makers E. The state-based approach assumes that under certain conditions trade protection can raise social welfare and that national policy reflects the balance of power between competing interest groups
Answer: C.
Who was in the coalition supporting tariffs on tires in the Grizz podcast? A. Tire company owners and tire company customers B. Tire company workers and tire company customers C. Tire company owners and tire company workers
Answer: C.
There are two reasons why firms might be efficient in the long run but not efficient in the short run: A. High labor productivity B. Diminishing marginal returns of capital C. Economies of experience D. Relative capital abundance E. Economies of scale
Answer: C. and E.
The winners of ISI policies generally included (check all that apply - pay attention to the reasoning): A. Farmers, because they earned more from agricultural exports B. Farmers, because they gained access to cheaper, locally made manufactured goods C. Urban workers, because they gained access to cheaper, locally made manufactured goods D. Urban workers, because they earned more from increased job opportunities in the manufacturing sector E. Factory owners in comparative disadvantaged sectors
Answer: D, E.
China is labor abundant relative to the US and the US is capital abundant relative to China. According to Stolper-Samuelson, when China began to trade more intensively with the United States, this would have the following effects in the US: A. Higher relative prices for labor intensive goods and higher relative prices for capital intensive goods, and therefore lower wages for labor and higher profits for capital in the US B. Lower relative prices for labor intensive goods and higher relative prices for capital intensive goods, and therefore higher wages for labor and higher profits for capital in the US C. Lower relative prices for labor intensive goods and lower relative prices for capital intensive goods, and therefore lower wages for labor and higher profits for capital in the US D. Lower relative prices for labor intensive goods and higher relative prices for capital intensive goods, and therefore lower wages fo
Answer: D.
ISI policies increase opportunities for ... A. rent seeking - efforts by private actors to achieve higher-than-market returns by investing in highly productive real estate B. governments to implement reforms to bring the economic system back into balance C. urban workers to seek housing that costs less money to rent D. rent seeking - efforts by private actors to achieve higher-than-market returns by corruptly using the political system, for example bribing officials to acquire import licenses
Answer: D.
In the Game of Trust, which strategy tends to win if the game is played just once? A. Copycat B. Cooperate C. Detective D. Cheat E. Grudger
Answer: D.
A firm's decision about whether to conduct international transactions through the market or to internalize these transactions depends on an interaction between A. Locational advantages and profit opportunities B. Natural resource opportunities and market opportunities C. Locational advantages and market imperfections D. Labor costs and transportation costs E. Comparative advantage and transaction costs
C. Locational advantages and market imperfections
Foreign direct investment includes (check all that apply) A. When an individual investor buys a mutual fund invested in foreign firms B. When an investment firm lends money to a foreign government C. When a firm in one country purchases an existing plant or factory in a second country D. When a firm in one country builds a new plant or factory in a second country E. When an investment firm buys sovereign bonds from a foreign government
C. When a firm in one country purchases an existing plant or factory in a second country D. When a firm in one country builds a new plant or factory in a second country
