Accredited Test Bank Solution For
International Economics 5th Edition By
Robert C. Feenstra Alan M. Taylor
[All Lessons Included]
Complete Chapter Solution Manual
are Included (Ch.1 to Ch.18)
• Rapid Download
• Quick Turnaround
• Complete Chapters Provided
, Table of Contents are Given Below
Part 1: International Trade Theory
1. Trade in the Global Economy
2. Trade and Technology: The Ricardian Model
3. Gains and Losses from Trade in the Specific-Factors Model
4. Trade and Resources: The Heckscher-Ohlin Model
5. Movement of Labor and Capital Between Countries
Part 2: International Trade Policy
6. Import Tariffs and Quotas Under Perfect Competition
7. Export Subsidies in Agriculture and High-Technology Industries
8. International Trade Agreements and Economic Integration
9. Trade and the Environment
Part 3: Exchange Rates and Open-Economy Macroeconomics
10. National and International Accounts: Income, Wealth, and the Balance of Payments
11. Exchange Rates and the Foreign Exchange Market: An Asset Approach
12. Money, Interest Rates, and Exchange Rates
13. Price Levels and the Exchange Rate in the Long Run
14. Output and the Exchange Rate in the Short Run
15. Fixed versus Floating: International Monetary Experience
Part 4: International Macroeconomic Policy
16. Macroeconomic Policy and Coordination Under Floating Exchange Rates
17. Optimum Currency Areas and the Euro
18. Developing Countries and Macroeconomic Issues
PAGE 1
,Question 1. In the Ricardian model of trade, the primary determinant of comparative
advantage between two countries is:
A) Relative factor endowments
B) Differences in technology
C) Differences in resource prices
D) Relative preferences
Answer: B
Explanation: The Ricardian model emphasizes technological differences as the basis for
comparative advantage, assuming labor productivity varies across countries due to
technology, leading to trade patterns.
Question 2. According to the Heckscher-Ohlin model, a country with abundant capital
will tend to:
A) Export capital-intensive goods
B) Import capital-intensive goods
C) Have no trade patterns based on factor endowments
D) Export labor-intensive goods
Answer: A
Explanation: The Heckscher-Ohlin model predicts that countries will export goods that
intensively use their abundant resources; thus, capital-abundant countries export
capital-intensive goods.
Question 3. In the Specific-Factors model, when a country opens to trade, the owner of
the specific factor in the exporting sector typically:
A) Loses income
B) Gains income
PAGE 2
, C) Experiences no change
D) Loses all influence
Answer: B
Explanation: When trade opens, the owner of the specific factor in the exporting sector
benefits from higher prices and increased demand, gaining income.
Question 4. Which of the following best describes a tariff?
A) A tax on imports
B) A quota on exports
C) A subsidy to domestic producers
D) An agreement to reduce trade barriers
Answer: A
Explanation: A tariff is a tax imposed on imported goods, raising their price and affecting
trade flows.
Question 5. Under perfect competition, an import quota tends to:
A) Increase domestic prices of imported goods
B) Decrease domestic prices of imported goods
C) Have no effect on domestic prices
D) Decrease domestic producers' profits
Answer: A
Explanation: Quotas limit imports, reducing supply and thus increasing domestic prices
for the affected goods.
Question 6. An export subsidy in a high-technology industry is likely to:
PAGE 3
International Economics 5th Edition By
Robert C. Feenstra Alan M. Taylor
[All Lessons Included]
Complete Chapter Solution Manual
are Included (Ch.1 to Ch.18)
• Rapid Download
• Quick Turnaround
• Complete Chapters Provided
, Table of Contents are Given Below
Part 1: International Trade Theory
1. Trade in the Global Economy
2. Trade and Technology: The Ricardian Model
3. Gains and Losses from Trade in the Specific-Factors Model
4. Trade and Resources: The Heckscher-Ohlin Model
5. Movement of Labor and Capital Between Countries
Part 2: International Trade Policy
6. Import Tariffs and Quotas Under Perfect Competition
7. Export Subsidies in Agriculture and High-Technology Industries
8. International Trade Agreements and Economic Integration
9. Trade and the Environment
Part 3: Exchange Rates and Open-Economy Macroeconomics
10. National and International Accounts: Income, Wealth, and the Balance of Payments
11. Exchange Rates and the Foreign Exchange Market: An Asset Approach
12. Money, Interest Rates, and Exchange Rates
13. Price Levels and the Exchange Rate in the Long Run
14. Output and the Exchange Rate in the Short Run
15. Fixed versus Floating: International Monetary Experience
Part 4: International Macroeconomic Policy
16. Macroeconomic Policy and Coordination Under Floating Exchange Rates
17. Optimum Currency Areas and the Euro
18. Developing Countries and Macroeconomic Issues
PAGE 1
,Question 1. In the Ricardian model of trade, the primary determinant of comparative
advantage between two countries is:
A) Relative factor endowments
B) Differences in technology
C) Differences in resource prices
D) Relative preferences
Answer: B
Explanation: The Ricardian model emphasizes technological differences as the basis for
comparative advantage, assuming labor productivity varies across countries due to
technology, leading to trade patterns.
Question 2. According to the Heckscher-Ohlin model, a country with abundant capital
will tend to:
A) Export capital-intensive goods
B) Import capital-intensive goods
C) Have no trade patterns based on factor endowments
D) Export labor-intensive goods
Answer: A
Explanation: The Heckscher-Ohlin model predicts that countries will export goods that
intensively use their abundant resources; thus, capital-abundant countries export
capital-intensive goods.
Question 3. In the Specific-Factors model, when a country opens to trade, the owner of
the specific factor in the exporting sector typically:
A) Loses income
B) Gains income
PAGE 2
, C) Experiences no change
D) Loses all influence
Answer: B
Explanation: When trade opens, the owner of the specific factor in the exporting sector
benefits from higher prices and increased demand, gaining income.
Question 4. Which of the following best describes a tariff?
A) A tax on imports
B) A quota on exports
C) A subsidy to domestic producers
D) An agreement to reduce trade barriers
Answer: A
Explanation: A tariff is a tax imposed on imported goods, raising their price and affecting
trade flows.
Question 5. Under perfect competition, an import quota tends to:
A) Increase domestic prices of imported goods
B) Decrease domestic prices of imported goods
C) Have no effect on domestic prices
D) Decrease domestic producers' profits
Answer: A
Explanation: Quotas limit imports, reducing supply and thus increasing domestic prices
for the affected goods.
Question 6. An export subsidy in a high-technology industry is likely to:
PAGE 3
