INTERNATIONAL ECONOMICS THEORY AND
POLICY UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ Gross Domestic Product (GDP).
Answer: A measurement of the total goods and services produced
within a country.
◉ developing countries.
Answer: countries with less productive economies and a lower
quality of life
◉ service offshoring (service outsourcing).
Answer: practice of hiring foreign workers or contracting with an
international third party service provider to run service based
functions of a particular industry
◉ opportunity cost.
Answer: Cost of the next best alternative use of money, time, or
resources when one choice is made rather than another
◉ Ricardian Model.
,Answer: explains how the level of a country's technology affects the
wages paid to labor, such that countries with better technologies
have higher wages
◉ production possibilities curve.
Answer: A curve that describes the maximum amount of one good
that can be produced for every possible level of production of the
other good.
◉ Production Possibilities Frontier (PPF).
Answer: a diagram that shows the productively efficient
combinations of two products that an economy can produce given
the resources it has available
◉ absolute advantage.
Answer: the ability to produce more of a given product using a given
amount of resources
◉ partial equilibrium analysis.
Answer: the analysis of a single market in isolation, ignoring any
feedbacks that may come from induced changes in other markets
◉ general equilibrium analysis.
,Answer: the analysis of all the economy's markets simultaneously,
recognizing the interactions among the various markets
◉ relative demand.
Answer: The ratio of the demand for one good to the demand for
another
◉ relative demand curve.
Answer: The quantity demanded of one good divided by the quantity
demanded of another good; how many units are demanded of a good
for each unit demanded of another good
◉ relative supply curve.
Answer: the quantity supplied of one good divided by the quantity
supplied of another good; how many units are supplied of a good for
each unit supplied of another good
◉ gains from trade.
Answer: the extra output that trading partners obtain through
specialization of production and exchange of goods and services
◉ Relative wages.
Answer: the wages of the domestic country relative to the wages in
the foreign country
, ◉ pauper labor argument.
Answer: Foreign competition is unfair and hurts other countries
when it is based on low wages
◉ Specialization.
Answer: the concentration of the productive efforts of individuals
and firms on a limited number of activities
◉ derived demand.
Answer: Business demand that ultimately comes from (derives
from) the demand for consumer goods.
◉ nontraded goods.
Answer: goods that are neither imported nor exported, for reasons
like high transportation costs. Domestic produced and consumed
products.
◉ unit labor requirement.
Answer: indicates the constant number of hours of labor required to
produce one unit of output
◉ Mobile Factors.
POLICY UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ Gross Domestic Product (GDP).
Answer: A measurement of the total goods and services produced
within a country.
◉ developing countries.
Answer: countries with less productive economies and a lower
quality of life
◉ service offshoring (service outsourcing).
Answer: practice of hiring foreign workers or contracting with an
international third party service provider to run service based
functions of a particular industry
◉ opportunity cost.
Answer: Cost of the next best alternative use of money, time, or
resources when one choice is made rather than another
◉ Ricardian Model.
,Answer: explains how the level of a country's technology affects the
wages paid to labor, such that countries with better technologies
have higher wages
◉ production possibilities curve.
Answer: A curve that describes the maximum amount of one good
that can be produced for every possible level of production of the
other good.
◉ Production Possibilities Frontier (PPF).
Answer: a diagram that shows the productively efficient
combinations of two products that an economy can produce given
the resources it has available
◉ absolute advantage.
Answer: the ability to produce more of a given product using a given
amount of resources
◉ partial equilibrium analysis.
Answer: the analysis of a single market in isolation, ignoring any
feedbacks that may come from induced changes in other markets
◉ general equilibrium analysis.
,Answer: the analysis of all the economy's markets simultaneously,
recognizing the interactions among the various markets
◉ relative demand.
Answer: The ratio of the demand for one good to the demand for
another
◉ relative demand curve.
Answer: The quantity demanded of one good divided by the quantity
demanded of another good; how many units are demanded of a good
for each unit demanded of another good
◉ relative supply curve.
Answer: the quantity supplied of one good divided by the quantity
supplied of another good; how many units are supplied of a good for
each unit supplied of another good
◉ gains from trade.
Answer: the extra output that trading partners obtain through
specialization of production and exchange of goods and services
◉ Relative wages.
Answer: the wages of the domestic country relative to the wages in
the foreign country
, ◉ pauper labor argument.
Answer: Foreign competition is unfair and hurts other countries
when it is based on low wages
◉ Specialization.
Answer: the concentration of the productive efforts of individuals
and firms on a limited number of activities
◉ derived demand.
Answer: Business demand that ultimately comes from (derives
from) the demand for consumer goods.
◉ nontraded goods.
Answer: goods that are neither imported nor exported, for reasons
like high transportation costs. Domestic produced and consumed
products.
◉ unit labor requirement.
Answer: indicates the constant number of hours of labor required to
produce one unit of output
◉ Mobile Factors.
