Test Bank
International Economics Theory And Policy,
By Paul R. Krugman
12th Edition
,Contents Page
Contents Iii
Chapter 1 Introduction 1
Overview Of Section I: International Trade Theory 3
Chapter 2 Labor Productivity And Comparative Advantage: The Ricardian
Model 7 Chapter 3 Specific Factors
Chapter 4 Resources And Trade: The Heckscher-Ohlin Model 21
Chapter 5 The Standard Trade Model 27
Chapter 6 Economies Of Scale, Imperfect Competition, And International Trade 35
Chapter 7 International Factor Movements 41
Overview Of Section Ii: International Trade Policy 47
Chapter 8 The Instruments Of Trade Policy 49
Chapter 9 The Political Economy Of Trade Policy 57
Chapter 10 Trade Policy In Developing Countries 65
Chapter 11 Controversies In Trade Policy 71
Overview Of Section Iii: Exchange Rates And Open Economy
Macroeconomics 77
Chapter 12 National Income Accounting And The Balance Of Payments 81
Chapter 13 Exchange Rates And The Foreign Exchange Market: 89
An Asset Approach
Chapter 14 Money, Interest Rates, And Exchange Rates 101
Chapter 15 Price Levels And The Exchange Rate In The Long Run 109
Chapter 16 Output And The Exchange Rate In The Short Run 119
Chapter 17 Fixed Exchange Rates And Foreign Exchange Intervention 131
Overview Of Section Iv: International Macroeconomic Policy 141
Chapter 18 The International Monetary System, 1870-1973 145
Chapter 19 Macroeconomic Policy And Coordination Under 153
Floating Exchange Rates
Chapter 20 Optimum Currency Areas And The European Experience 163
Chapter 21 The Global Capital Market: Performance And Policy Problems 171
Chapter 22 Developing Countries: Growth, Crisis, And Reform 177
Mathematical Postscript 185
,International Economics, 12e (Krugman/Obstfeld/Melitz)
Chapter 1 Introduction
1.1 What Is International Economics About?
1) Historians Of Economic Thought Often Describe Written By And
Published In As The First
Real Exposition Of An Economic Model.
A) "Of The Balance Of Trade," David Hume, 1776
B) "Wealth Of Nations," David Hume, 1758
C) "Wealth Of Nations," Adam Smith, 1758
D) "Wealth Of Nations," Adam Smith, 1776
E) "Of The Balance Of Trade," David Hume,
1758 Answer: E
Page Ref: 1
Difficulty: Easy
2) From 1960 To 2012
A) The U.S. Economy Roughly Tripled In Size.
B) U.S. Imports Roughly Tripled In Size.
C) The Share Of Us Trade In The Global Economy Roughly Tripled In Size.
D) U.S. Imports Roughly Tripled As Compared To U.S. Exports.
E) U.S. Exports Roughly Tripled In
Size. Answer: C
Page Ref: 1
Difficulty: Easy
3) The United States Is Less Dependent On Trade Than Most Other Countries Because
A) The United States Is A Relatively Large Country With Diverse Resources.
B) The United States Is A "Superpower."
C) The Military Power Of The United States Makes It Less Dependent On Anything.
D) The United States Invests In Many Other Countries.
E) Many Countries Invest In The United
States. Answer: A
Page Ref: 2
Difficulty: Easy
4) Theories Of International Economics From The 18th And 19th Centuries Are
A) Not Relevant To Current Policy Analysis.
B) Only Of Moderate Relevance In Today's Modern International Economy.
C) Highly Relevant In Today's Modern International Economy.
D) The Only Theories That Actually Relevant To Modern International Economy.
E) Not Well Understood By Modern Mathematically Oriented
Theorists. Answer: C
Page Ref: 2
Difficulty: Easy
, 5) An Important Insight Of International Trade Theory Is That When Two Countries
Engage In Voluntary Trade
A) One Country Always Benefits At The Expense Of The Other.
B) It Is Almost Always Beneficial To Both Countries.
C) It Only Benefits The Low Wage Country.
D) It Only Benefits The High Wage Country.
E) It Is Almost Never Beneficial To Both
Countries. Answer: B
Page Ref: 4
Difficulty: Easy
6) If There Are Large Disparities In Wage Levels Between Countries, Then
A) Trade Is Likely To Be Harmful To Both Countries.
B) Trade Is Likely To Be Harmful To The Country With The High Wages.
C) Trade Is Likely To Be Harmful To The Country With The Low Wages.
D) Trade Is Likely To Be Harmful To Neither Country.
E) Trade Is Likely To Have No Effect On Either
Country. Answer: D
Page Ref: 4
Difficulty: Easy
7) The Benefits Of International Trade Are Derived From Trade In
A) Tangible Goods Only.
B) Intangible Goods Only.
C) Goods But Not Services.
D) Services But Not Goods.
E) Anything Of
Value. Answer: E
Page Ref: 4
Difficulty: Easy
8) Which Of The Following Does Not Belong?
A) Nafta
B) Uruguay Round
C) World Trade Organization
D) Non-Tariff Barriers
E) Major Free Trade Agreements Of The
1990s Answer: D
Page Ref: 5-6
Difficulty: Easy
International Economics Theory And Policy,
By Paul R. Krugman
12th Edition
,Contents Page
Contents Iii
Chapter 1 Introduction 1
Overview Of Section I: International Trade Theory 3
Chapter 2 Labor Productivity And Comparative Advantage: The Ricardian
Model 7 Chapter 3 Specific Factors
Chapter 4 Resources And Trade: The Heckscher-Ohlin Model 21
Chapter 5 The Standard Trade Model 27
Chapter 6 Economies Of Scale, Imperfect Competition, And International Trade 35
Chapter 7 International Factor Movements 41
Overview Of Section Ii: International Trade Policy 47
Chapter 8 The Instruments Of Trade Policy 49
Chapter 9 The Political Economy Of Trade Policy 57
Chapter 10 Trade Policy In Developing Countries 65
Chapter 11 Controversies In Trade Policy 71
Overview Of Section Iii: Exchange Rates And Open Economy
Macroeconomics 77
Chapter 12 National Income Accounting And The Balance Of Payments 81
Chapter 13 Exchange Rates And The Foreign Exchange Market: 89
An Asset Approach
Chapter 14 Money, Interest Rates, And Exchange Rates 101
Chapter 15 Price Levels And The Exchange Rate In The Long Run 109
Chapter 16 Output And The Exchange Rate In The Short Run 119
Chapter 17 Fixed Exchange Rates And Foreign Exchange Intervention 131
Overview Of Section Iv: International Macroeconomic Policy 141
Chapter 18 The International Monetary System, 1870-1973 145
Chapter 19 Macroeconomic Policy And Coordination Under 153
Floating Exchange Rates
Chapter 20 Optimum Currency Areas And The European Experience 163
Chapter 21 The Global Capital Market: Performance And Policy Problems 171
Chapter 22 Developing Countries: Growth, Crisis, And Reform 177
Mathematical Postscript 185
,International Economics, 12e (Krugman/Obstfeld/Melitz)
Chapter 1 Introduction
1.1 What Is International Economics About?
1) Historians Of Economic Thought Often Describe Written By And
Published In As The First
Real Exposition Of An Economic Model.
A) "Of The Balance Of Trade," David Hume, 1776
B) "Wealth Of Nations," David Hume, 1758
C) "Wealth Of Nations," Adam Smith, 1758
D) "Wealth Of Nations," Adam Smith, 1776
E) "Of The Balance Of Trade," David Hume,
1758 Answer: E
Page Ref: 1
Difficulty: Easy
2) From 1960 To 2012
A) The U.S. Economy Roughly Tripled In Size.
B) U.S. Imports Roughly Tripled In Size.
C) The Share Of Us Trade In The Global Economy Roughly Tripled In Size.
D) U.S. Imports Roughly Tripled As Compared To U.S. Exports.
E) U.S. Exports Roughly Tripled In
Size. Answer: C
Page Ref: 1
Difficulty: Easy
3) The United States Is Less Dependent On Trade Than Most Other Countries Because
A) The United States Is A Relatively Large Country With Diverse Resources.
B) The United States Is A "Superpower."
C) The Military Power Of The United States Makes It Less Dependent On Anything.
D) The United States Invests In Many Other Countries.
E) Many Countries Invest In The United
States. Answer: A
Page Ref: 2
Difficulty: Easy
4) Theories Of International Economics From The 18th And 19th Centuries Are
A) Not Relevant To Current Policy Analysis.
B) Only Of Moderate Relevance In Today's Modern International Economy.
C) Highly Relevant In Today's Modern International Economy.
D) The Only Theories That Actually Relevant To Modern International Economy.
E) Not Well Understood By Modern Mathematically Oriented
Theorists. Answer: C
Page Ref: 2
Difficulty: Easy
, 5) An Important Insight Of International Trade Theory Is That When Two Countries
Engage In Voluntary Trade
A) One Country Always Benefits At The Expense Of The Other.
B) It Is Almost Always Beneficial To Both Countries.
C) It Only Benefits The Low Wage Country.
D) It Only Benefits The High Wage Country.
E) It Is Almost Never Beneficial To Both
Countries. Answer: B
Page Ref: 4
Difficulty: Easy
6) If There Are Large Disparities In Wage Levels Between Countries, Then
A) Trade Is Likely To Be Harmful To Both Countries.
B) Trade Is Likely To Be Harmful To The Country With The High Wages.
C) Trade Is Likely To Be Harmful To The Country With The Low Wages.
D) Trade Is Likely To Be Harmful To Neither Country.
E) Trade Is Likely To Have No Effect On Either
Country. Answer: D
Page Ref: 4
Difficulty: Easy
7) The Benefits Of International Trade Are Derived From Trade In
A) Tangible Goods Only.
B) Intangible Goods Only.
C) Goods But Not Services.
D) Services But Not Goods.
E) Anything Of
Value. Answer: E
Page Ref: 4
Difficulty: Easy
8) Which Of The Following Does Not Belong?
A) Nafta
B) Uruguay Round
C) World Trade Organization
D) Non-Tariff Barriers
E) Major Free Trade Agreements Of The
1990s Answer: D
Page Ref: 5-6
Difficulty: Easy
