How many British pounds would it cost to buy a pair of American designer jeans costing 45 if the exchange rate is 1.50 dollars per British pound?
A) 10 British pounds
B) 20 British pounds
C) 30 British pounds
D) 35 British pounds
E) 25 British pounds
Question 2 - The balance of trade records
A) trade in financial assets.
B) the current account plus long-term capital.
C) the value of merchandise exports minus imports.
D) short-term capital plus the basic balance.
Question 3 - In effect, the U.S. does subsidize high-tech firms by subsidizing R&D. This is done through
A) the budget of the Department of Education.
B) systematic protection through the levying of tariffs.
C) systematic protection through the establishment of NTBs.
D) relatively accelerated depreciation of R&D investment in the Federal tax codes.
E) subsidies for high-tech firms.
Question 4 - In the HO model, reciprocal demand leads to an equilibrium price by inducing changes in both demand and supply.
Indicate whether the statement is true or false
Question 5 - Critics of debt relief make all of the following arguments EXCEPT
A) it would be wasted money since the conditions that caused the debt would be likely to persist.
B) countries with large foreign debts are poorly administered.
C) debt relief can quickly fuel a new round of borrowing that simply restores debt to prior levels.
D) debt relief will encourage other nations to borrow excessively with the hope that their debts may be forgiven in the future.
E) the cost of debt relief to the most severely indebted countries is too large for the high income countries to afford.
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