Question 1

Sale of U.S.government bonds to foreigners is an example of direct foreign investment in the United States.

Accepted Answer

A) True 
 B)False

Question 2

________ policies involve government support for manufacturing sectors in which a country has potential comparative advantage.

Accepted Answer

A)  Comprehensive development
B)  Primary-export-led development
C)  Import-substitution development
D)  Outward-looking developmentE) B) and C)
F) C) and D)

Question 3

If an economy experiences an increase in its labor force,everything else constant,then its production possibilities frontier (PPF) will

Accepted Answer

A)  expand outward but keep its original shape.
B)  expand outward largely in the direction of the labor intensive good.
C)  expand outward largely in the direction of the capital intensive good.
D)  not expand until capital grows.E) A) and D)
F) B) and C)

Question 4

The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the

Accepted Answer

A)  income elasticity of demand.
B)  income expansion path.
C)  demand elasticity equivalent.
D)  trade effectiveness.E) B) and C)
F) C) and D)

Question 5

The movement of production to affiliate firms outside of the country is known as outsourcing.

Accepted Answer

A) True 
 B)False

Question 6

________ would gain from expanded immigration.

Accepted Answer

A)  Domestic labor
B)  Domestic capital
C)  Both domestic labor and capital
D)  Neither domestic labor nor capitalE) All of the above
F) A) and B)

Question 7

What does the "brain drain" refer to and why is it a problem for developing countries?

Accepted Answer

The brain drain refers to the migration ...

Question 8

The Dutch Disease refers to a deadly outbreak of influenza that destroyed all international trade for the Netherlands in the 1960s.

Accepted Answer

A) True 
 B)False

Question 9

Economic growth could make a country worse off.

Accepted Answer

A) True 
 B)False

Question 10

Legal immigration to the United States peaked just before World War I,but today is almost zero.

Accepted Answer

A) True 
 B)False

Question 11

Over time,countries grow in a fashion so that their production possibility frontiers always retain the same shape.

Accepted Answer

A) True 
 B)False

Question 12

A key element in outward-looking development policies is to maintain open markets so that internal prices reflect world prices.

Accepted Answer

A) True 
 B)False

Question 13

Economic growth occurs because

Accepted Answer

A)  labor forces grow.
B)  capital stocks grow.
C)  new inventions raise productivity.
D)  All of the above.E) All of the above
F) A) and B)

Question 14

Rich country to poor country migration is relatively uncommon.

Accepted Answer

A) True 
 B)False

Question 15

An example of direct foreign investment is given by

Accepted Answer

A)  the sale of U.S. government bonds to foreigners.
B)  the sale of General Motors bonds to foreigners.
C)  the behavior of multinational corporations such as Ford.
D)  all of the above.E) B) and D)
F) A) and D)

Question 16

Recently,many developing countries throughout the world have begun to institute policies that seek to

Accepted Answer

A)  liberalize international trade by lowering trade barriers.
B)  reduce dependence on international trade by raising trade barriers.
C)  reduce dependence on international trade by instituting laws that call for buying only domestically made goods.
D)  Two of the above.E) None of the above
F) All of the above

Question 17

If the expansion of a country's exports leads to growth in non-export industries this is called a(n)

Accepted Answer

A)  secondary effect.
B)  linkage effect.
C)  elementary effect.
D)  None of the above.E) A) and C)
F) B) and C)

Question 18

What is outsourcing?

Accepted Answer

A)  The process of vertically integrating the factors of production.
B)  The process of selling products overseas bypassing import tariffs.
C)  The movement of production to affiliate firms outside of the country.
D)  None of the above.E) A) and B)
F) All of the above

Question 19

A government program that attempts to stimulate domestic production of a good in which the country has a natural comparative advantage because of its domestic resources is an example of a(n) ________ policy.

Accepted Answer

A)  primary-export-led
B)   import-substitution development
C)   outward-looking development
D)   linkage-effectE) All of the above
F) A) and B)

Question 20

Only a few countries have followed outward-oriented development strategies for extensive periods of time.Which of the following countries is not one of those that have followed such a strategy successfully in the last decades.

Accepted Answer

A)  Russia
B)  Japan
C)  South Korea
D)  SingaporeE) B) and D)
F) A) and C)

Exam 10: International Trade and Economic Growth

Only a few countries have followed outward-oriented development strategies for extensive periods of time.Which of the following countries is not one of those that have followed such a strategy successfully in the last decades.

Correct AnswerverifiedShow Answer

The movement of production to affiliate firms outside of the country is known as outsourcing.

Correct AnswerverifiedShow Answer

________ would gain from expanded immigration.

Correct AnswerverifiedShow Answer

Rich country to poor country migration is relatively uncommon.

Correct AnswerverifiedShow Answer

Legal immigration to the United States peaked just before World War I,but today is almost zero.

Correct AnswerverifiedShow Answer

What is outsourcing?

Correct AnswerverifiedShow Answer

Sale of U.S.government bonds to foreigners is an example of direct foreign investment in the United States.

Correct AnswerverifiedShow Answer

The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the

Correct AnswerverifiedShow Answer

An example of direct foreign investment is given by

Correct AnswerverifiedShow Answer

Over time,countries grow in a fashion so that their production possibility frontiers always retain the same shape.

Correct AnswerverifiedShow Answer

If the expansion of a country's exports leads to growth in non-export industries this is called a(n)

Correct AnswerverifiedShow Answer

A government program that attempts to stimulate domestic production of a good in which the country has a natural comparative advantage because of its domestic resources is an example of a(n) ________ policy.

Correct AnswerverifiedShow Answer

What does the "brain drain" refer to and why is it a problem for developing countries?

Correct AnswerverifiedThe brain drain refers to the migration ...View AnswerShow Answer

If an economy experiences an increase in its labor force,everything else constant,then its production possibilities frontier (PPF) will

Correct AnswerverifiedShow Answer

Economic growth occurs because

Correct AnswerverifiedShow Answer

Recently,many developing countries throughout the world have begun to institute policies that seek to

Correct AnswerverifiedShow Answer

The Dutch Disease refers to a deadly outbreak of influenza that destroyed all international trade for the Netherlands in the 1960s.

Correct AnswerverifiedShow Answer

________ policies involve government support for manufacturing sectors in which a country has potential comparative advantage.

Correct AnswerverifiedShow Answer

Economic growth could make a country worse off.

Correct AnswerverifiedShow Answer

A key element in outward-looking development policies is to maintain open markets so that internal prices reflect world prices.

Correct AnswerverifiedShow Answer

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The brain drain refers to the migration ...
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