If a country were to experience an increase in its factors of production, its production possibilities frontier would shift outward.
Indicate whether the statement is true or false
Question 2 - Which of the following was NOT one of the causes of the Asian financial crises of 1997 and 1998?
A) A current account deficit and financial account surpluses
B) The use of exports as an engine of economic growth by the countries involved
C) China's 1994 devaluation of its fixed exchange rate
D) The appreciation of the U.S. dollar and depreciation of the Japanese yen
E) Crony capitalism
Question 3 - If the economy is producing at point a on its production possibility frontier, then
A) all of the country's workers are employed.
B) all of the country's workers are specialized in one product.
C) all of the country's capital is used for one product.
D) all of its capital is used, but not efficiently.
E) all of the country's exports are produced in equal amounts.
Question 4 - If a country faces action under Section 301 of the U.S. Trade Act of 1974, it means that the country has
A) exceeded average import growth by more than 301 percent.
B) exceeded average export growth by more than 301 percent.
C) tariffs that are above 301 percent.
D) been charged by the United States with systematically engaging in unfair trade practices.
E) been charged by the WTO with violating its trade obligations.
Question 5 - What is productivity?
What will be an ideal response?
Question 6 - Refer to the figure above. If A forms a customs union with B, it will import
A) 400 units from B.
B) 200 units from C.
C) 200 units from each.
D) 400 units from B and 200 units from C.
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