Based on Table 4.1, according to the Heckscher-Ohlin Theorem, U.S. exports should be goods that
A) intensively use labor input.
B) intensively use capital input.
C) use capital and labor in about equal proportions.
D) use either labor or capital input, depending on the good.
E) Not enough information to tell.
Question 2 - Which of the following is not appropriate, if we live in a world of fixed exchange rates?
A) monetary approach to the exchange rate
B) elasticities approach
C) monetary approach to the BOP
D) absorption approach
Question 3 - Internal economies of scale arise when the cost per unit
A) falls as the average firm grows larger.
B) rises as the industry grows larger.
C) falls as the industry grows larger.
D) rises as the average firm grows larger.
E) remains constant over a broad range of output.
Question 4 - If the expansion of an export industry leads to the provision of infrastructure such as roads or airports, this is called a(n)
A) secondary effect.
B) linkage effect.
C) elementary effect.
D) None of the above.
Question 5 - In a two country world, at least one country must lose from trade.
Indicate whether the statement is true or false
Question 6 - What is the significant feature of a preferential arrangement?
What will be an ideal response?
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