国际经济学Test Paper.doc

Multiple choice: 1. Trade between two countries can benefit both countries ifA. each country exports that good in which it has a comparative advantage. B. each country enjoys superior terms of trade.C. each country has a more elastic demand for the imported goods.D. each country has a more elastic supply for the supplied goods.2. Given the following information: Unit Labor Requirements Cloth Widgets Home 10 20 Foreign 60 30A. Neither country has a comparative advantage.B. Home has a comparative advantage in cloth.C. Foreign has a comparative advantage in cloth.D. Home has a comparative advantage in widgets.3. In the 2-factor, 2 good Heckscher- Ohlin model, a change from autarky (no trade) to tradeA. will tend to make the wages in both countries more similar.B. will equalize the wages in both countries.C. will tend to make the wages in both countries less similar.D. will tend to make wages equal to returns to capital.4. The Leontieff ParadoxA. supported the validity of the Ricardian theory of comparative advantage.B. supported the validity of the Heckscher-Ohlin model.C. failed to support the validity of the Ricardian theory.D. failed to support the validity of the Heckscher-Ohlin model. 5. Suppose that there are two factors, capital and land, and that the United States is relatively land endowed while the European Union is relatively capital-endowed. According to the Heckscher-Ohlin model,A. European landowners should support US-European free trade.B. European capitalists should support US-European free trade.C. all capitalists in both countries should support free trade.D. all landowners should support free trade.6. The following are all assumptions that must be accepted in order to apply the Heckscher-Ohlin Theory, except for one:A. countries differ in their endowments of factors of production.B. countries differ in their technologies. C. there are two factors of production.D. production is subject to constant returns to scale.7. Export-biased growth in Country H willA. improve the terms of trade of Country H.B. trigger anti-bias regulations of the WTO.C. worsen the terms of trade of Country F (the trade partner).D. improve the terms of trade of Country F. 8. If the U.S. Agency for International Development transfers funds to poor countries in Sub-Saharan Africa, this mustA. worsen the U.S. terms of trade.B. improve the U.S. terms of trade.C. improve the terms of trade of the African aid recipients.D. None of the above.9. After WWI, Germany was forced to make large reparations - transfers of real income- to France. If the marginal propensity to consume was equal in both countries, and if Frances demand was biased toward food (relative to Germanys demand pattern) then we would expect to findA. the worlds relative price for food remains unchanged.B. the worlds relative price for food increase.C. the worlds relative price for food decrease.D. the world relative price for both food and non-food rise.10. A large country experiencing import-biased economic growth will tend to experienceA. positive terms of trade.B. deteriorating terms of trade.C. improving terms of trade. D. immiserizing terms of trade.11. Intra-industry trade is most common in the trade patterns ofA. developing countries of Asia and Africa.B. industrial countries of Western Europe.C. all countries.D. North-South trade.12. International trade based solely on internal scale economies in both countries is likely to be carried out by aA. relatively large number of price competing firms.B. relatively small number of price competing firms.C. relatively small number of competing oligopolists.D. monopoly firms in each country/industry. 13. Two countries engaged in trade in products with scale economies, produced under conditions of monopolistic competition, are likely to be engaged inA. price competition.B. inter-industry trade.C. intra-industry trade.D. Heckscher-Ohlinean trade.14. If a small country imposes a tariff, thenA. the producers must suffer a loss.B. the consumers must suffer a loss.C. the government revenue must suffer a loss.D. the demand curve must shift to the left.15. Should the home country be large relative to its trade partners, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms of the trade rectangle exceed the sum of theA. revenue effect plus redistribution effect.B. protective effect plus revenue effect.C. consumption effect plus redistribution effect.D. protective distortion effect plus consumption distortion effect. 16. An appreciation of a countrys currencyA. decreases the relative price of its exports and lowers the relative price of its imports.B. raises the relative price of its exports and raises the relative price of its imports.C. lowers the relative price of its exports and raises the relative price of its imports.D. raises the relative price of its exports and lowers the relative price of its imports.17. Which one of the following statements is the most accurate?A. The dollar rate of return on euro deposits is approximately the euro interest rate minus the rate of depreciation of the dollar against the euro.B. The dollar rate of return on euro deposits is the euro interest rate minus the rate of depreciation of the dollar against the euro.C. The dollar rate of return on euro deposits is approximately the euro interest rate plus the rate of appreciation of the dollar against the euro.D. The dollar rate of return on euro deposits is approximately the euro interest rate plus the rate of depreciation of the dollar against the euro.18. If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is 4 percent, thenA. an investor should invest only in dollars.B. an investor should invest only in euros.C. an investor should be indifferent between dollars and euros.D. It is impossible to tell given the information.19. Which one of the following statements is the most accurate?A. A permanent increase in a countrys money supply causes a proportional long-run depreciation of its currency against foreign currencies.B. A temporary increase in a countrys money supply causes a proportional long-run depreciation of its currency against foreign currencies.C. A permanent increase in a countrys money supply causes a proportional long-run appreciation of its currency against foreign currencies.D. A permanent increase in a countrys money supply causes a proportional short-run depreciation of its currency against foreign currencies.20. Changes in the money supply growth rate A. are neutral in the short run.B. need not be neutral in the short run.C. are neutral both in the short and long run.D. are neutral in the long run.21. Under Purchasing Power Parity,A. E$/E = PUS / PE.B. E$/E = PE / PES.C. E$/E = PUS + PE.D. E$/E = PUS - PE.22. Which of the following statements is the most accurate?A. The law of one price applies to the general price level while PPP applies to individual commodities.B. The law of one price applies to individual commodities while PPP applies to both the general price level and to individual commodities.C. PPP applies only to individual commodities.D. The law of one price applies to individual commodities while PPP applies to the general price level.23. Under the monetary approach to the exchange rate theory, money supply growth at a constant rateA. eventually results in ongoing price level deflation at the same rate, but changes in this long-run deflation rate do not affect the full-employment output level or the long-run relative prices of goods and services.B. eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do affect the full-employment output level and the long-run relative prices of goods and services.C. eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level or the long-run relative prices of goods and services.D. eventually results in ongoing price level inflation at the same rate, but changes in this long-run inflation rate do not affect the full-employment output level, only the long-run relative prices of goods and services.24. What is the effect of a permanent fiscal expansion?A. It not only has an immediate impact in the output market but also affects the asset markets.B. It only has an immediate impact in the output marketC. It only has an immediate impact on the asset markets.D. It neither has an immediate impact in the output market nor affects the asset markets.25. Under the DDAA framework, which statement is the most accurate?A. Only monetary policy can bring the economy to full employment.B. Only fiscal policy can bring the economy to full employment.C. Monetary policy by itself or fiscal policy by itself can bring the economy to full employment.D. Neither policy is capable of bringing the economy to full employment.Graphing questions. (or Concise reply to the following questions)1. Discusses the effects of a rise in the interest rate paid by euro deposits on the exchanger rate.Answer: For a given U.S. interest rate and a given expectation with regard to the future exchange rate, a rise in the interest rate paid by euro deposits causes the dollar to depreciate.2. at are the predictions for the long run of the Monetary Approach?Money supplies: Given the equations,E$/E = PUS/PEPUS = MSUS/L(R$, YUS)PE = MSE/L(RE, YE)one can show that an increase in the U.S. money supply, MSUS, causes a proportional increase in the U.S. price level, PUS, which in turn causes a proportional increase in E$/.