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.Management Sciences
Category: The International Economy And Globalization
An optimal tariff is one which reduces imports to the level at which ____ equals ____?
A. imports, exports
B. the balance of trade, zero
C. The demand for currency the supply of currency
D. social marginal cost, social marginal benefit
When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?
A. trade diversion
B. trade channeling
C. trade creation and trade diversion
D. trade creation
Economists suggest that an optimum tariff would be one which reduce imports to a point where___________?
A. Comparative advantage is achieved
B. Price elasticity of imports is unity and tariff revenue is maximized
C. import prices are the same as export prices
D. marginal social cost equals marginal social benefit
If a country has a burden of debt it cannot sustain it can ?
A. reschedule debt
B. get a loan from an international organization
C. default on the loan
D. any of the above
If there is a balance of payments deficit then in a floating exchange rate system ?
A. The external value of the currency would tend to fall
B. The external value of the currency would tend to rise
C. The injections from trade are greater then the withdrawals
D. Aggregate demand is increasing
The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?
A. Ricardo Malthus theorem
B. Heckscher Ohlin theorem
C. Lucas-Laffer theorem
D. Friedman Samuelson theorem
Term of trade for a country are the ratio of _______________ to _____________?
A. its opportunity costs; world opportunity costs
B. export prices; import prices
C. Value of exports; value of imports
D. its currency; other currencies
A significant portion of actual world trade patterns results from ?
A. The industrial policies of governments
B. different sizes of the countries
C. different factor endowment between countries
D. the different tastes and preferences of people in different countries
Tariffs are used to protect infant industries these industries are those which ?
A. employ many young or untrained workers
B. are competing with well-established overseas firms
C. are not yet large enough to achieve economies of scale
D. use a new technology
Import substitution is the replacement of ____ by domestic production _____ protection of ________?
A. exports, subsidies
B. exports, patents
C. imports, high tariffs or import quotas
D. imports, subsidies
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