Reading 13: International Trade and Capital Flows

Which of the following best defines a country in a state of autarky?

The value of goods and services produced by the labor and capital of a country's citizens, regardless of where they are located, is measured by:

A country has an absolute advantage in producing a good if it:

According to the Ricardian model of trade, the source of comparative advantage is differences in:

In the Heckscher-Ohlin model, a country with relatively more capital than labor will specialize in the production of:

Which of the following is considered a valid argument for trade protection among some economists, specifically to allow new industries to grow?

A tax imposed by a government on imported goods is best described as a:

If a large country imposes a tariff, it is possible for national welfare to increase if:

In the context of trade restrictions, 'quota rents' refer to:

Which of the following trading blocs removes barriers to the movement of labor and capital among member countries?

Which component of the balance of payments includes unilateral transfers?

The sale of patent rights to a foreign entity would be recorded in which balance of payments account?

Assuming a country has a current account deficit, which of the following equations correctly represents the relationship between the trade deficit, savings, and investment?

The International Monetary Fund (IMF) is primarily concerned with:

Suppose Country A produces 100 units of cloth or 50 units of wine per worker, while Country B produces 80 units of cloth or 20 units of wine per worker. Which country has a comparative advantage in wine?

Using the data: Country A (100 cloth/50 wine), Country B (80 cloth/20 wine). Which country has an absolute advantage in cloth?

An agreement where countries adopt a single currency and a common economic policy is best described as a:

Foreign Direct Investment (FDI) is best defined as:

Which of the following describes the impact of a voluntary export restraint (VER) on the importing country compared to a quota?

If a country has a trade deficit, it must have:

Which of the following is considered a 'spending tool' of fiscal policy regarding trade?

What is the primary benefit of international trade for an importing country?

Which international organization focuses on fighting poverty in developing countries through financial and technical assistance?

The 'terms of trade' is defined as:

If the terms of trade increase to 102 from a base of 100, it means:

In the Heckscher-Ohlin model, trade results in:

A Minimum Domestic Content requirement acts as a trade restriction by:

Which of the following is a potential cost of free trade?

Capital restrictions may be used by governments to:

From the perspective of a domestic government, a tariff generates revenue represented by:

Which account records the purchase of foreign financial assets by domestic residents?

If a country has low private savings and a large government deficit, it is most likely to have:

Which of the following is considered a 'non-produced, non-financial asset' recorded in the Capital Account?

The North American Free Trade Agreement (NAFTA) is an example of a:

A country restricts foreign investment in its telecommunications sector. This is an example of:

If a government provides an export subsidy, the price of the good in the domestic market will typically:

Which of the following accounts tracks income from dividends on stock holdings?

Deadweight loss from a tariff represents:

When a country imports a good, the domestic price of that good:

Calculate the opportunity cost of 1 unit of Cloth for England if: 1 unit of labor produces 90 Cloth or 80 Wine.

Which of the following is an objective of the World Trade Organization (WTO)?

If a country has a current account surplus, it means:

The 'price' of one currency in terms of another is called:

Which trade restriction involves a country voluntarily limiting the amount of a good it exports?

If private savings equals 500, government savings equals -100 (a deficit), and investment equals 600, what is the trade balance (X - M)?

A 'Multinational Corporation' is defined as:

Which of the following is true regarding the efficiency of trade restrictions?

In a Customs Union, members:

The 'price currency' in the exchange rate quote 1.25 USD/EUR is:

If a country has a trade deficit of 100, private savings of 300, and domestic investment of 500, what is the government's fiscal position?