econ 327 study guide wsu questions with answers

econ 327 study guide wsu questions with \| \| \| \| \| \| \|




answers


An important insight of international trade theory is that when two countries
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engage in voluntary trade\| \| \|




A) one country always benefits at the expense of the other.
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B) it is almost always beneficial to both countries.
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C) it only benefits the low wage country.
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D) it only benefits the high wage country.
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E) it is almost never beneficial to both countries. - CORRECT ANSWERS
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✔✔B) it is almost always beneficial to both countries.
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Because the Constitution forbids restraints on interstate trade
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A) the U.S. may not impose tariffs on imports from NAFTA countries.
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B) the U.S. may not affect the international value of the $ U.S.
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C) the U.S. may not put restraints on foreign investments in California if it
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involves a financial intermediary in New York State.
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D) the U.S. may not impose export duties.
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E) the U.S. may not disrupt commerce between Florida and Hawaii. -
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CORRECT ANSWERS ✔✔E) the U.S. may not disrupt commerce between
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Florida and Hawaii. \| \|

,"Trade is generally harmful if there are large disparities between countries in
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wages."



A) This is generally true.
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B) This is generally false.
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C) Trade theory has nothing to say about this issue.
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D) This is true if the trade partner ignores child labor laws.
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E) This is true if the trade partner uses prison labor - CORRECT ANSWERS
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✔✔B) This is generally false.
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International capital markets experience a kind of risk not faced in domestic
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capital markets, namely
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A) "economic meltdown" risk.
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B) Flood and hurricane crisis risk.
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C) the risk of unexpected downgrading of assets by Standard and Poor.
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D) the risk of exchange rate fluctuations.
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E) the risk of political upheaval - CORRECT ANSWERS ✔✔D) the risk of
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exchange rate fluctuations \| \|




The gravity model suggests that over time
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A) trade between neighboring countries will increase.
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,B) trade between all countries will increase.
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C) world trade will eventually be swallowed by a black hole.
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D) trade between Earth and other planets will become important.
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E) the value of trade between two countries will be proportional to the
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product of the two countries' GDP - CORRECT ANSWERS ✔✔E) the value of
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trade between two countries will be proportional to the product of the two
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countries' GDP. \|




According to the gravity model, a characteristic that tends to affect the
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probability of trade existing between any two countries is \| \| \| \| \| \| \| \|




A) their cultural affinity.
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B) the average weight/value of their traded goods.
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C) their colonial-historical ties.
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D) the distance between them.
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E) the number of different product varieties produced by their industries. -
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CORRECT ANSWERS ✔✔D) the distance between them. \| \| \| \| \| \|




We see that the Netherlands, Belgium, and Ireland trade considerably more
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with the United States than with many other countries.
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A) This is explained by the gravity model, since these are all large countries.
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B) This is explained by the gravity model, since these are all small countries.
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C) This fails to be consistent with the gravity model, since these are small
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countries.

, D) This fails to be consistent with the gravity model, since these are large
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countries.

E) This is explained by the gravity model, since they do not share borders. -
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CORRECT ANSWERS ✔✔C) This fails to be consistent with the gravity
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model, since these are small countries.
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Which of the following does NOT explain the extent of trade between Ireland
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and the U.S.?
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A) historical ties
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B) cultural Linguistic ties
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C) Gravity Model
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D) multinational corporations
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E) large numbers of Irish-Americans - CORRECT ANSWERS ✔✔C) Gravity
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Model



In the present, most of the exports from China are
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A) manufactured goods.
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B) services.
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C) primary products including agricultural.
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D) technology intensive products.
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E) overpriced by world market standards. - CORRECT ANSWERS ✔✔A)
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manufactured goods \|