International Economics Pitt Exam 3
rules of origin.
Because goods produced within a free-trade area are entitled to be traded freely within the free-trade area, determining what goods are produced within the free-trade area is important and relies on:
East Asia and the Pacific
Between 1990 and 2003, which region of the world experienced the larges decline in the share of people living on less than $2 per day?
A worldwide tax system
"Assume that a foreign affiliate of multinational enterprise makes an accounting profit. If the profits are repatriated to the home country, under what type of system will the profits be taxed by the home country?"
An inflow of labor or capital will expand the PPF.
"In the long run, what is the expected impact of an inflow of a factor of production on a national economy?"
"An inflow of labor will decrease the wage rate, while an inflow of capital will increase the wage rate."
"In the short run, what is the expected impact of an inflow of a factor of production on a national economy? "
negative screening
"On April 12, 2018, Blackrock launched a Social Responsibility Investment (SRI) fund that includes the criterion that the fund will not include investments in gun-related industries. This criterion is an example of "
"The profits would be taxed $3000 minus the $2000 in credit for taxes paid in Guilder, for a total of $1000 in tax owed to Florin. "
"Suppose there are two countries in the world: Florin and Guilder. Florin has a worldwide tax system, with a tax rate of 30% on corporate profits and a credit for taxes paid in other countries. Guilder has a territorial tax system with a tax rate of 20% on corporate profits. A Florin corporation opens a subsidiary in Guilder, which makes $10,000/year in profit and pays $2000/year in taxes to the Guilder government. If the subsidiary repatriates $10,000 in profits to the parent corporation in Florin, how much tax with the parent company owe in Florin?"
restricting the availability of oil.
A cartel, like OPEC, is able to raise the price of a primary product, like oil, by
Lower middle income
According to the World Bank income categories, what income status did Myanmar have in 2017?
has an internal tariff rate of zero, and does not raise tariffs for non-participants.
Although regional trading agreements violate the most favored nation principle of the World Trade Organization, exceptions are made if the proposed agreement
Trade diversion
As a result of joining a trade bloc, Country A finds that it is purchasing relatively more expensive cars from Country B, a fellow bloc member, rather than purchasing the less expensive cars from Country C, a trading bloc outsider. This phenomenon is called:
The WTO can authorize the countries filing the unfair trade complaint to impose retaliatory trade policies against the offending country.
If an unfair trade complaint is filed with the WTO and a panel appointed by the WTO determines that the complaint is valid, the WTO will instruct the offending country to alter its trade policy to avoid the unfair effects that were found to exist. If the offending country fails to correct its trade policy as directed by the WTO, what can the WTO do?
East Asia and the Pacific
In 1990, which region of the world had the largest number of people living on less than $2 per day?
1990s
In what decade of the twentieth century did the largest number of immigrants enter the United States?
1910s
In what decade of the twentieth century was the foreign-born share of the United States population at its peak?
exchange preferences among themselves and receive preferential access to markets in industrialized countries.
One deviation from the most favored nation principle that the WTO accepts is that developing countries have a right to:
the reconstruction of Europe after World War II.
The World Bank was founded in 1944 as the International Bank for Reconstruction and Development for the purpose of financing
oversee global rules of government policy toward international trade.
The World Trade Organization was created in 1995 to:
The public good nature of global economic stability.
The goal of developing international institutions, such as the World Bank, the IMF, and the WTO, is to address which of the following sources of market inefficiency?
transfer price
The price at which units within a single MNE sell goods and services to other units within the MNE is the
members of a customs union adopt a common set of external trade barriers.
The primary difference between a free trade area and a customs union is that:
the market within the trade bloc is larger than the market in any of the member countries and foreign firms often seek to establish locations on the basis of market size.
Trade blocs can attract more foreign direct investment into member countries because:
Syria
What country is currently the source of the largest number of refugees?
When the markets of the various countries in the trade bloc are joined, firms within those countries are presented with larger markets than they had before the trade bloc was created, and those larger markets present opportunities for firms within the trade bloc countries to expand to take advantage of additional scale economies.
What effect does a trade bloc have on scales of production?
10 years
What is the average time that a person spends in the status of a refugee?
Asia
What region of the world is the destination of the largest number of international migrants in 2017?
The Smoot-Hawley Act increased tariffs on certain imports into the U.S. and contributed to the severity of the Great Depression.
What was the effect of the Smoot-Hawley Act?
Turkey
Which country is currently hosting the largest number of refugees?
Infant industry protection
Which of the following arguments for trade protection is most commonly associated with import substituting industrialization?
The rise of developing countries as a voting bloc.
Which of the following characterized the Doha Round of international trade negotiations?
The discovery of new oil reserves in Scotland
Which of the following could erode the pricing power of OPEC?
Access to low production costs
Which of the following describes the goal of most vertical foreign direct investment?
Recession in the United States in the late 1970s and early 1980s. Increased revenues for oil price shocks in the 1970s. High tariffs in Latin American countries in the 1960s and 1970s.
Which of the following events contributed to the debt crisis in Latin America in the 1980s?
British imperialism
Which of the following events contributed to the decline in the economic power of China and India in the 1800s?
The discovery of natural gas in the North Sea
Which of the following events in the Netherlands led to the development of the economic phenomenon referred to as "The Dutch Disease"?
The declining price for computer technology
Which of the following events might provide evidence that contradicts the Singer-Prebish Thesis?
The invention of polyester
Which of the following events might provide evidence to support the Singer-Prebish Thesis?
Exports from a newly discovered diamond mine in Myanmar result in the appreciation of its currency, the kyat, and a contraction of its other export industries.
Which of the following examples is best described by the economic phenomenon referred to as "The Dutch Disease"?
Most favored nation status
Which of the following identifies a nondiscrimination policy among trading partners?
The Uruguay Round narrowed down the set of NTB codes as set up by the Kennedy Round and the Tokyo Round.
Which of the following is NOT true of the Uruguay Round of the multilateral trade negotiations?
"Fiat, an Italian automobile company, buys a controlling interest in Chrysler, a U.S. automobile company."
Which of the following is an example of foreign direct investment?
High tariff rates
Which of the following policies are associated with import substituting industrialization?
Privatization of state-owned enterprises
Which of the following policies are associated with the "Washington Consensus"?
Foreign direct investment
Which of the following provided the largest source of international financial capital for developing countries in 2016?
A trade bloc may lower firms' costs by allowing them to exploit economies of scale.
Which of the following statements about a trade bloc is accurate?
Economic populism encourages short-term economic growth at the expense of long-term economic growth and stability.
Which of the following statements best describes economic populism?
Because developing countries mainly export primary products, their terms of trade may worsen over time
Which of the following statements best describes the Singer-Prebish Thesis?
Imports of clothing and textiles into the member countries were diverted away from low-cost suppliers in Asia.
Which of the following was an observable effect of NAFTA?
Inflows of FDI to the host country
Which of the following will add to the FDI stock of the host country?
Export-oriented industrialization
High savings rate and low inflation is often associated with
Corruption
Developing countries tend to have high levels of government control over the economy and weak legal systems. Together, these characteristics encourage
Asia
From what region of the world did the largest share of international migrants emigrate in 2017?
Economic populism
Rising inequality and hyperinflation are often associated with
unilaterally use threats of retaliation to open foreign markets for U.S. trade.
Section 301 of the Trade Act of 1974 allows the U.S. president to:
High savings and investment rates Economic support from the United States High levels of education
Targeted industrial policies are often credited for the export success of high performing economies in East Asia. Which of the following policies are also credited with supporting export success in these economies?
Tesla builds a new electric car production facility in Mexico.
Tesla is a U.S. company that manufacturers electric cars. Which of the following is an example of a horizontal foreign direct investment for Tesla?
customs union
The Southern Common Market (MERCOSUR) is actually a _____.
may lead to repatriation of $2 trillion in investment funds to U.S. parent corporations from their foreign affiliates.
The United Nations Conference on Trade and Development (UNCTAD) has estimated that the 2017 Tax Cut and Jobs Act in the United States
