Question # 1

Investors engage in ____ when they move funds into foreign currencies in order to take advantage of interest rates abroad the are higher than domestic interest rates.

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Currency arbitrage

Interest arbitrage

Short positions

Long positions

If a small country imposes a tariff on an imported goods terms of trade will

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Improve

worsen

Not change

any of the above

Debit (-) items in the balance of payments correspond to anything that.

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Involve receipts from foreigners

Involves payments to foreigners

Increase the domestic money supply

Decrease the demand for foreign exchange

Which trade policy results in the government levying both a specific tariff and an advalorem tariff on imported goods.

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Compound tariff

Nominals tariff

Effective tariff

Revenue tariff

International dumping may involve.

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Selling goods to foreigners at a price below that charged domestic consumers

Selling goods to foreigners at a price below the cost of production

antidumping duties being levied on the imported dumped goods

All of the above

The supply of foreign currency tends to be

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Upward sloping

Down ward sloping

Vertical

Any of the above

The gain from international trade are closely related to.

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the labor theory of value

How much the autarky price differs from international terms of trade change.

The fact that a country must lose from trade

All of the above

All of the following are debit items in the balance of payment eexcept.

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Capital outflows

merchandise exports

Private gifts to foreigners

Foreign and granted to other nations

When imports from a higher cost supplier with in customs union replace imports from a lower cost supplier outside the custom union, there exists.

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Trade creation

Trade diversion

Dynamic welfare effects

Comprehensive welfare efffects

In balance of payments accounting tourism and travel are classified in the

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Merchandise trade account

Services account

Unilateral transfers account

Capital account

currency speculation is__________ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations.

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Destabilizing

Stabilizing

Inflationary

Deflationary

The most widely traded currency in the foreign exchange market is the.

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Euro

Chinses yuan

British pound

U.S. Dollar

According to the Heckscher - Ohlin model

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^{Every one automatically gains from trade}

The gainers from trade out number the losers from trade

The scarce factor necessary gains from trade

None of the above

Those who argue in favor of import protection generally give the impression that such restricted trade will.

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Decrease the level of national security

Provide benefits to some particular industry

Provide benefits to the entire nation

Not yield welfare losses for the nation

To stabilize the prices of primary products international commodity agreements have utilized all of the following except.

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Tariff -rate quotas applied to imported goods.

Production and export controls.

Buffer stocks

Multilateral contracts

The NAFTA is a

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Monetary union

Free trade area

Common market

Customs union

Advocates of industrial policy maintain that government should.

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Purse free trade as a policy that leads to maximum global efficiency

Grant subsides to firms offering potential comparative advantage.

Provide loans to domestic workers in exporting industries.

Increase interest rates on loans made to firms in import competing industries.

International trade in good sand services is sometimes used as a substitute for all of the following except.

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Internationals movement of capital

International movement of labor

International movements of technology

Domestic production of different goods and services.

All of the following are credit items in the balance of payments except.

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Investment inflows

Merchandise exports

Payment for American service's to foreigners

Private give to foreign residents

the_____________ analysis considers the ability of domestic and foreign prices to adjust to devaluation in the short run.

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Pass through

Absorption

Adjustment mechanism

currency contract period

To be considered a good candidate for an export cartel a commodity should.

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Be a manufactured good

Be a primary product

Have a high price elasticity of supply

Have a low price elasticity of demand

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