Quiz Answers

the GATT was - a collection of tariff standards - an international UN agency with trade oversight - a US government agency - an international treaty governing trade - an IMF agency with trade oversight

an international treaty governing trade

the potential for gains from the rearrangement of production among countries is due to - differing opportunity costs - absolute advantage - scarcity - trade-offs

differing opportunity costs

in claiming that "size matters," the gravity model asserts that there is a strong empirical relationship between the size of a country's economy and the - influence it exerts in world affairs - volume of its imports and exports - control it has over world trade organizations - ability it has to impose its will upon trading partners

volume of its imports and exports

in each sector of a specific factor economy, profit-maximizing employers will demand labor up to the point where - the marginal product of labor times the price of the product equals the wage rate - the price of the product equals the marginal product of labor times the wage rate - the marginal product of labor equals the wage rate - the value produced by an additional person-hour equals the price of the product

the marginal product of labor times the price of the product equals the wage rate

classify each of the following transactions as belonging primarily to the sphere of international trade analysis or international monetary analysis - foreign purchase of US dollars - the US imports crude oil from the middle east - the US imposes tariffs on foreign steel - the chinese government purchases US treasury bonds - the chinese currency is seen as being undervalued

- international monetary analysis - trade analysis - trade analysis - international monetary analysis - international monetary analysis

in general, which of the following tends to promote the probability of trade volumes between two countries? - mutual membership in preferential trade agreements - historical ties - sizes of economies - linguistic and/or cultural affinity - all of the above

all of the above

a century ago each country's exports were shaped largely by - physical capital - human resources - treaties and diplomacy - climate and natural resources

climate and natural resources

the sources of modern trade are largely rooted in - decisions implemented by multinational organizations - country differences in human and human-created resources - treaties written by capitalist governments - country differences in climate and natural resources

country differences in human and human-created resources

when opening up to trade, an economy - exports the good whose relative price has increased and imports the good whose relative price has decreased - exports and imports the good whose relative price has decreased - exports the good whose relative price has decreased and imports the good whose relative price has increased - exports and imports the good whose relative prices has increaed

exports the good whose relative price has increased and imports the good whose relative price has decreased

cost-benefit analysis of international trade - focuses attention on conflicts of interest between countries - focuses attention on conflicts of interest within countries - is basically useless - is empirically intractable

focuses attention on conflicts of interest within countries

since WWII (the early 1950s), the proportion of most countries' production being used in some other country - decreased - fluctuated with no clear trend - increased - remained constant

increased

movement of labor from a foreign country to the domestic (home) economy - increases the marginal product of labor in foreign - increases the marginal product of labor at home - occurs only in the marginal product of labor is higher in foreign than at home - leaves the marginal product of land unchanged in both countries

increases the marginal product of labor in foreign

transactions that involve the physical movement of goods or a tangible commitment of resources are the domain of... - international monetary analysis - international diplomacy - international trade analysis - international intrigue

international trade analysis

international economics can be divided into two broad subfields: - international trade and international money - developed and less developed - monetary and barter - static and dynamic - macro and micro

international trade and international money

an important insight of international trade theory is that when countries exchange goods and services with the other, it - tends to create unemployment in both countries - is always beneficial to both countries - is typically harmful to the technologically lagging country - is typically beneficial only to the low wage trade partner country - is usually beneficial to both countries

is usually beneficial to both countries

in the present, most of the exports from china are in - technology intensive products - primary products including agriculture - services - manufactured goods

manufactured goods

in the real world, the dividing line between trade and monetary issues is... - always clear and distinct - subject to negotiation between trading partners - neither simple nor clear-cut - determined by the legal system

neither simple nor clear-cut

assume a specific factors economy produces two goods (cloth and food) and that when representing this economy graphically, cloth is on the x-axis and food is on the y-axis for a trading economy, - the budget constraint intersects the production possibility frontier at the chosen production point - the slope of the budget constraint is -(Pf / Pc) - the slope of the budget constraint is (Pc / Pf) - the budget constraint is tangent to the production possibility frontier at the chosen production point

the budget constraint is tangent to the production possibility frontier at the chosen production point

according to the gravity model, a characteristic that tends to affect the probability of trade existing between any two countries is - their colonial-historical ties - the average weight/value of their traded goods - the distance between them - their cultural affinity - the number of varieties produced on the average by their industries

the distance between them

assume a specific factors economy produces two goods (cloth and food) and that when representing the output of this economy graphically, cloth is on the x-axis and food is on the y-axis when the price of cloth increases by 2% and the price of food increases by 2% - the output of cloth rises - the output of food falls - the real incomes of land owners remain the same - the wage rate rises by less than the increase in the price of cloth

the real incomes of land owners remain the same