An import tariff will cause the terms of trade of the ________ country to ________ and will ________ the country.
A) importing; improve; benefit
B) exporting; improve; benefit
C) importing; suffer; harm
D) exporting; improve; harm
E) importing; improve; harm
Question 2 - Refer to the figure above. In equilibrium, this country consumes at point
A) B.
B) C.
C) D.
D) E.
Question 3 - Why is the U.S. putting less emphasis on multilateral and more emphasis on bilateral trade agreements?
What will be an ideal response?
Question 4 - If the law of one price holds for a single good, then absolute PPP measured with price indexes will also hold.
Indicate whether the statement is true or false
Question 5 - If a nation has no absolute advantage, then it
A) cannot gain from trade.
B) still gains from trade.
C) can only gain from trade if it raises its productivity levels.
D) can only gain from trade if it reduces wages paid.
E) can only gain from trade if it produces outside its production possibilities curve.
Question 6 - The race-to-the-bottom concept described in the text refers to
A) the situation in which countries with high standards are forced to lower their standards or face the loss of jobs and industry.
B) the situation in which human rights are not respected by trading countries.
C) adopting the standards of a few selected middle-income and high-income countries.
D) the use of low per-capita income as a means of comparing the well-being of individuals.
E) None of the above.
Quick Reply
