If the world price for a good is above a nation's pre-trade equilibrium price, then the nation
A) will export the good.
B) will import the good.
C) will neither export nor import the good.
D) cannot gain from trade.
E) Both C and D.
Question 2 - If one observes that Japan was traditionally a net foreign lender, one could conclude that relative to its international trade and financial partners
A) Japan's intertemporal production possibilities are biased toward present consumption.
B) Japan's intertemporal production possibilities are biased toward future consumption.
C) Japan's intertemporal production possibilities are larger than that of the other countries.
D) Japan's intertemporal production possibilities are not biased.
E) Japan preferred to consume beyond its production in the present.
Question 3 - The gains from international trade are closely related to
A) the labor theory of value.
B) how much the autarky price differs from the international price (i.e. the terms of trade).
C) the fact that one country must lose from trade.
D) All of the above.
Question 4 - The higher the inflation differential between countries, the less likely it is that relative PPP will hold.
Indicate whether the statement is true or false
Quick Reply
