第1題AccordingtoAdamSmith,internationaltradewasbasedon().AabsoluteadvantageBcomparativeadvantageCbothabsoluteandcomparativeadvantageDneitherabsolutenorcomparativeadvantage第2題Mercantilistsbelievedthat()AfreetradeisbeneficialfortheeconomyBanykindoftradewillharmtheeconomyCexportswillleavelessgoodsavailabletothelocaleconomyDexportsaregoodandimportsareharmfultotheeconomy第3題Theassumptionsofabsoluteadvantagedoesnotinclude().Aonefactorinput(labor)BincreasingreturnstoscaleCthedifferencesinlaborproductivitybetweenthetwocountriesDperfectcompetitionmarket第4題Ricardoexplainedthelawofcomparativeadvantageonthebasisof()AthelabortheoryofvalueBtheopportunitycosttheoryCthelawofdiminishingreturnsDalloftheabove第5題Ifinatwo-nationAandB,twocommodityXandYworld,itisestablishedthatnationAhascomparativeadvantageincommodityX,thennationBmusthave().AanabsoluteadvantageincommodityYB

anabsolutedisadvantageincommodityYCacomparativedisadvantageincommodityYDacomparativeadvantageincommodityY第6題

IfnationAcanproduce5unitsofgoodXor10unitsofgoodYandnationBcanproduce4unitsofgoodXor12unitsofgoodY,thenbothnationswouldgainfromtradeifnationAsold()unitsofgood()foroneunitofgood()A0.4;X;YB0.4;Y;XC2.5;X;YD2.5;Y;X第1題Withfreetradeunderincreasingcosts().AneithernationwillspecializecompletelyinproductionBatleastonenationwillconsumeaboveitsproductionfrontierCasmallnationcangainfromtradeDalloftheabove第2題Mutuallybeneficialtradecannotoccurifproductionfrontiersare:()AequalbuttastesarenotBdifferentbuttastesarethesameCdifferentandtastesarealsodifferentDthesameandtastesarealsothesame.第3題Nation1'sshareofthegainsfromtradewillbegreater:().Athegreaterisnation1'sdemandfornation2'sexportsBthecloserPx/Pywithtradesettlestonation2'spretradePx/PyCtheweakerisnation2'sdemandfornation1'sexportsDthecloserPx/Pywithtradesettlestonation1'spretradePx/Py第4題Thegainsfromtradecanbedividedintogainsfromexchangeand().AgainsfromcountryBgainsfromconsumptionCgainsfromwelfaresurplusDgainsfromspecialization第5題5.ThemarginalrateofsubstitutionMRSofXforYinconsumptionreferstothe:(

)A

theamountofYanationmustgiveuptoproduceeachadditionalunitofXBamountofYthatanationmustgiveupforoneextraunitofXandstillremainonthesameindifferencecurveCtheabsoluteslopeoftheproductionfrontieratthepointofproductionDalltheaboveExercises第1題Supposethatnation1have400unitslaborLand20units

capitalK,nation2have300unitsLand100unitsKandcommodityXislabor-intensivecommodity,Yiscapital-intensivecommodity.

Beforetradebetweennation1andnation2,PX/PYinnation1is(

)thanPX/PYinnation2.PXisthepriceofXandPYisthepriceofY.AhigherB

lowerCsame第2題Continuewithquestion1,ifthedemandsofcommodityofXandYandthetechnologyinproducingXandYarethesameinnation1andnation2beforetrde,thewageinnation1is(

)thanthatinnation2.AhigherBlowerCsame第3題Continuewithquestion1,

accordingtoH-Omodel,nation1shouldexport()AcommodityXBcommodityYCnoneofXandYDbothXandY第4題

Supposethatnation1have400unitslaborLand20units

capitalK,nation2have300unitsLand100unitsKandcommodityXislabor-intensivecommodity,Yiscapital-intensivecommodity.

Aftertrade,PX/PYinnation1is()thanPX/PYinnation2.AhigherBlowerCsame第5題AccordingtoH-O-Stheorem,thewagesinallnationswillbethesameafterallnationstakepartininternationaltrade.Thesehaven’thappenedbynow.Thepossiblereasonis()AthedifferenttechnologyBtradetariffsCnon-tradecommoditiesDallofthem第6題TheLeontiefParadoxreferstotheempiricalfindingthatU.S.exportsaremorecapital-intensivethanimportsubstitutes.()Exercises第1題Increasingreturnstoscalemainsthatthemoreyouproducethelowerthecost.()第2題Externaleconomiesrefertothereductionineach?rm’saveragecostofproductioncurveastheentireindustryoutputexpands.()第3題Withfreetradebetweentwonationsthatareidenticalineveryrespectunderincreasingreturnstoscalemodel,()AneithernationwillspecializecompletelyinproductionBallnationswillconsumeaboveitsproductionfrontierCallnationswillproducethesameproductDalloftheabove第4題Withfreetradebetweentwonationsthatareidenticalineveryrespectunderincreasingreturnstoscalemodel,thecommodityspecializedbyeverynationmayresultfrom()AhistoricalaccidentBtechnologyCdemandscaleDproductionscale第5題Gainsfromtradeinincreasingreturnstoscalemodelarereflectedin()AlowerpriceBmorechoiceofproductsCincreasedconsumptionDallofabove第6題Intra-industryismorelikelytohappenwhen()AproductsareheterogeneousBfirmsfaceconstantreturnstoscaleCfirmsareinaperfectcompetitionmarketDalloftheaboveExercises第1題Tariffswill()ADecreasedomesticproductionBIncreasedomesticconsumptionCIncreasethegovernmentrevenueDBenefitdomesticconsumers第2題SupposethetariffonT-shirtis10%,andthetariffonthecottontomaketheT-shirtis10%,onthedayofJune1st,thetariffonthecottongoestozero.Whichofthefollowingistrue?()AAfterJune1st,thenominalrateofprotectiononT-shirtisreducedBAfterJune1st,theeffectiverateofprotectiononcottonisincreasedCBeforeJune1st,thenominalrateofprotectionandtheeffectiverateofprotectiononT-shirtarethesameDNoneoftheabove第3題Comparetheeffectsofatariffinasmallcountryandalargecountry,tariffrevenueriseinthelargecountryby()inthesmallcountry.AMorethanBLessthanCEqualtoDAlloftheaboveispossible第4題Themainbenefitoftariffprotectiongoestodomesticconsumers.(

)第5題Atariffonimportedintermediateproductscanhurtsomeproducersintheindustry.()第6題Supposethetariffontheimportedinputsispositive.Keepingallotherthingsunchanged,whentheproductionofacommodityutilizehigherproportionoftheimportedinputs,theeffectivetariffrateonthecommoditywillbehigherthanthenominaltariffrateonthecommodity.(

)第7題Ahighertariffonimportedtextilewouldlikelyharm:(

)ADomesticmanufacturersoftextileBDomesticconsumersoftextileCThegovernmentDWorkersinthedomestictextileindustryExercises第1題Theso-calledinfantindustrytheoryismorejustifiedfor()thanfor().Adevelopednations/industrialnationsBdevelopednations/poorestnationsCrichnations/poornationsDdevelopingnations/industrialnations第2題Whichofthefollowingisfalseabouttariffsandquotas?ATariffsandquotasbothdecreasesocialwelfare.BTariffsarelessrestrictivethanquotasifdemandincreases.CQuotasinvolvethedistributionofimportlicenseswhiletariffsnot.DTariffsarerestrictedunderGATTrulesbutquotasarenot.第3題Which?of?the?following?is?false?with?respect?to?strategic?trade?policy??Ait?postulates?that?a?nation?can?gain?by?an?activist?trade?policy?Bit?is?practiced?to?some?extent?by?most?industrial?nations?Cit?can?easily?be?carried?out?Dall?of?the?above第4題ExportSubsidywillincreasesthedomesticpriceoftheexportedcommodity.第5題Anincreaseinthedemandoftheimportedcommoditysubjecttoagivenimportquotawillreducesthedomesticquantitydemandedofthecommodity.第6題Traderestrictionsareneededtoprotectdomesticlaboragainstcheapforeignlabor.Exercise第1題AcustomunionisanagreementtoremovebarrierstotradeamongitsmembersandtoAAdoptthesamecurrencyBAdoptafixedexchangerateCAdoptacommonexternaltariffDLeaveeachnationdetermineitsowntariffpolicy第2題Atrade-creatingcustomsunionisonewhere:Alower-costimportsfromoutsidethecustomsunionarereplacedbyhigher-costimportsfromaunionmemberBtradeamongmembersincreasesbuttradewithnonmembersdecreasesCtradeamongmembersdecreaseswhiletradewithnonmembersincreasesDnone?of?the?above第3題Whichisnotadynamicbenefitfromtheformationofacustomsunion?AbetterutilizationofeconomicresourcesBeconomiesofscaleCstimulustoinvestmentDtradecreation第4題Atrade-divertingcustomsunion().AincreasestradeamongunionmembersandwithnonmembernationsBreducestradeamongunionmembersandwithnonmembernationsCincreasestradeamongmembersbutreducestradewithnon-membersDreducestradeamongunionmembersbutincreasesitwithnonmembers第5題Afreetradeareaharmonizestradepoliciestowardtheoutsideworld.Exercise第1題WhichofthefollowingisNOTtheimportantbeneficialeffectthatinternationaltradecanhaveoneconomicdevelopment?ATradecanleadtothefullutilizationofotherwiseunderemployeddomesticresources.byexpandingthesizeofthemarket,trademakespossibledivisionoflaborandeconomiesofscale.Internationaltradeisthevehicleforthetransmissionofnewideas,newtechnology,andnewmanagerialandotherskills.AlloftheaboveBbyexpandingthesizeofthemarket,trademakespossibledivisionoflaborandeconomiesofscale.Internationaltradeisthevehicleforthetransmissionofnewideas,newtechnology,andnewmanagerialandotherskills.AlloftheaboveCInternationaltradeisthevehicleforthetransmissionofnewideas,newtechnology,andnewmanagerialandotherskills.AlloftheaboveDNoneoftheabove第2題WhichofthefollowingisNOTtheadvantageoftheimport-substitutionindustrialization(ISI)strategy?(1)Themarketfortheindustrialproductalreadyexists,asevidencedbyimportsofthecommodity,sothatrisksarereducedinsettingupanindustrytoreplaceimports.(2)Itiseasierfordevelopingnationstoprotecttheirdomesticmarketagainstforeigncompetitionthantoforcedevelopednationstolowertradebarriersagainsttheirmanufacturedexports.(3)Foreignfirmsareinducedtoestablishso-calledtarifffactoriestoovercomethetariffwallofdevelopingnations.Domesticindustriescangrowaccustomedtoprotectionfromforeigncompetitionandhavenoincentivetobecomemoreefficient.A

Themarketfortheindustrialproductalreadyexists,asevidencedbyimportsofthecommodity,sothatrisksarereducedinsettingupanindustrytoreplaceimports.B

Itiseasierfordevelopingnationstoprotecttheirdomesticmarketagainstforeigncompetitionthantoforcedevelopednationstolowertradebarriersagainsttheirmanufacturedexports.C

Foreignfirmsareinducedtoestablishso-calledtarifffactoriestoovercomethetariffwallofdevelopingnations.DDomesticindustriescangrowaccustomedtoprotectionfromforeigncompetitionandhavenoincentivetobecomemoreefficient.Exercise第1題Whichofthefollowingisincorrect?AInternationalcapitaltransfersincreasethenationalincomeoftheinvestingcountryB

InternationalcapitaltransfersincreasethenationalincomeofthehostcountryC

ThelevelofemploymenttendstofallintheinvestingnationDThelevelofemploymenttendstofallinthehostnation.第2題Whichofthefollowingisincorrect?AInternationalmigrationreducestotaloutput

inthenationofemigrationBInternationalmigrationincreasesrealwagesinthenationofemigrationCInternationalmigrationincreasestotaloutputinthenationofimmigration.D

Internationalmigrationincreasesrealwagesinthenationofimmigration.Exercise第1題Which?of?the?following?is?false??AA?credit?transaction?leads?to?a?payment?from?foreignersBA?debit?transaction?leads?to?a?payment?to?foreigners?CA?credit?transaction?is?entered?with?a?negative?signDDouble-entry?bookkeeping?refers?to?each?transaction?entered?twice.第2題ThepaymentofdividendbyanAmericancompanytoaforeignstockholderrepresents().AadebitintheU.S.capitalaccountBacreditinthecurrentaccountCacreditintheU.S.officialreserveaccountDadebitintheU.S.currentaccount第3題When?the?U.S.?ships?food?aid?to?a?developing?nation,?the?U.S.?debits:?Aunilateral?transfersBservices?Ccapital?Dofficial?reserves第4題Allthetransactionsoftheresidentsofanationwiththeresidentsofallothernationsduringaparticularperiodoftimearerecordedinthebalanceofpayments.第5題Debittransactionsarethosethatinvolvethereceiptofpaymentsfromforeigners.第6題WhenaU.K.residentpurchasesaU.S.stock,itisrecordedasacreditintheU.S.balanceofpayments.Exercise第1題Appreciationreferstoanincreaseinthedomesticpriceoftheforeigncurrency.().第2題Iftheforwardrateisbelowthepresentspotrate,theforeigncurrencyissaidtobeataforwardpremiumwithrespecttothedomesticcurrency.()第3題Assumethefollowingexchangerates:2=￡1inNewYork￥400=￡1inLondon￥200=0.9inTokyoWhatistheprofitratioofthetriangularorthree-pointarbitrage?()A2.56%B5.26%C11.1%D17.64%第4題Assumeaspeculatorsignaforwardagreementtosellpoundat2.00/￡1,ifthespotrateinthreemonthsSR=2.10/￡1,whatistheresultofthetransaction?()AThespeculatorearns5%inthetransaction.BThespeculatorearns2.5%inthetransaction.CThespeculatorloses2.5%inthetransaction.DThespeculatorloses5%inthetransaction.第5題Ifthepositiveinterestratedifferentialinfavorofaforeignmonetarycenteris4percentperyearandtheforeigncurrencyisataforwarddiscountof3percentperyear,roughlyhowmuchwouldaninterestarbitrageurearnfromthepurchasesofforeignthree-monthtreasurebillsifheorshecoveredtheforeignexchangerisk?()A4%B3%C1%D7%Exercise第1題Theabsolutepurchasing-powerparitytheorypostulatesthattheequilibriumexchangeratebetweentwocurrenciesisequaltotheratioofthepricelevelsinthetwonations.()第2題Accordingtothelawofoneprice,agivencommodityshouldhavethesameprice(sothatthepurchasingpowerofthetwocurrenciesisatparity)inbothcountrieswhenexpressedintermsofthesamecurrency.()第3題IftherelativePPPheld,theabsolutePPPwouldalsohold,butwhentheabsolutePPPholds,therelativePPPneednothold.()第4題TheBalassa–Samuelsoneffectpostulatesthattheratioofthepriceofnontradedtothepriceoftradedgoodsandservicesissystematicallyhigherindevelopednationsthanindevelopingnations.()第5題1intheUnitedStates.Theexchangeratewas0.4078￡/$tothedollarin1973.Iftherelativepurchasing-powerparity

theoryholdbetweentheUnitedKingdomandtheUnitedStatesbetween1973and2001.Whatistheexchangeratein2001?(

)A0.6944￡/$B0.9278￡/$C0.7588￡/$D1.0785￡/$第6題Adepreciationofanation’scurrencyshifts()AdownitssupplycurveofimportsintermsoftheforeigncurrencyBupitsdemandcurveofimportsintermsoftheforeigncurrencyCdownitsdemandcurveofimportsintermsoftheforeigncurrencyDdownitsdemandcurveofimportsintermsofthedomesticcurrency第7題Therelativepurchasingpowerparitytheorypostulatesthat()ATheequilibriumexchangerateisequaltotheratioofthepricelevelinthetwonationsBthechangeintheexchangerateoveraperiodoftimeshouldbeproportionaltotherelativechangeinthepricelevelinthetwonationsoverthesametimeperiodCthechangeintheexchangerateoveraperiodoftimeshouldbeproportionaltotheabsolutechangeinthepricelevelinthetwonationsoverthesameperiodDtheexchangerateataperiodoftimeshouldbeproportionaltotherelativepricesinthetwonations第8題Accordingtothemonetaryapproachtothebalanceofpayments,adeficitinthenation’sbalanceofpaymentsresultsfrom()Aanexcessinthenation’sstockofmoneysupplythatisnoteliminatedorcorrectedbythenation’smonetaryauthoritiesBanexcessinthestockofmoneydemandedinthenationthatisnotsatisfiedbydomesticmonetaryauthoritiesCanexcessinthestockofmoneydemandedintheothernationthatisnotsatisfiedbytheothernation’smonetaryauthoritiesDanexcessofimportsoverexportsinthenationExercise第1題Adevaluationreferstothedeliberate

increaseintheexchangeratebythenation’smonetaryauthoritiesfromonefixedorpeggedleveltoanother.

第2題TheU.S.demandcurveforeurosisderivedfromthedemandandsupplycurvesofU.S.exportsintermsofeuros.第3題Thegreaterthedevaluationordepreciationofthedollar,thegreaterisitsinflationaryimpactontheU.S.economyandthelessfeasibleistheincreaseoftheexchangerateasamethodofcorrectingthedeficitintheU.S.balanceofpayments.第4題Underthegoldstandard()AeachnationdefinesthepriceofgoldintermsofitscurrencyandthenstandsreadytobuyandsellanyamountofgoldatthatpriceBthereisfixedrelationshipbetweenanytwocurrenciescalledthemintparityCtheexchangerateisdeterminedbydemandandsupplybetweenthegoldpointsandispreventedfrommovingoutsidethegoldpointsbygoldshipmentsDalloftheabove第5題Adepreciationofadeficitnation’scurrencyfromaconditionoffullemployment().Amayimprovethenation’stradebalanceBwillimprovethenation’stradebalanceCwillleavethenation’stradebalanceunchangedDwillcausedeteriorationinthenation’stradebalance第6題Theforeignexchangemarketisstablewhen().AthedemandcurveofforeignexchangeisnegativelyinclinedandthesupplycurveofforeignexchangeispositivelyinclinedBthesupplycurveofforeignexchangeisnegativelyinclinedandlesselasticthanthedemandcurveCthesumoftheabsolutevaluesoftheelasticityofthenation’sdemandofimportsandtheforeigndemandforthenation’sexportsisgreaterthanoneDalloftheabove第7題Adepreciationofanation’scurrencyis().AinflationaryforthenationBdeflationaryforthenationCdeflationaryforthetradepartnerDanyoftheaboveexe