TEST BANK OF INTERNATIONAL ECONOMICS
PartⅠ. Fill in the blank with suitable content.
1.Seven themes recur throughout the study of international economics. These are , , , the balance of payments, exchange rate determination, international policy coordination, international capital market.
2.Countries engage in international trade for two basic reasons : and .
3.A country has a comparative advantage in producing a good if of producing that good in terms of other goods is lower in that country than it is in other countries.
**4. Labor is the only one factor of production. aLC、aLWand aLC、aLWare the unit labor requirement in cheese and wine at Home and Foreign, respectively. If , Home has a comparative advantage in cheese. pC/pWis the relative price of cheese, when Home and Foreign specialize in producing cheese and wine , respectively.
**5. Labor is the only one factor of production. aLC、aLWand aLC、aLWare the unit
labor requirement in cheese and wine at Home and Foreign, respectively. L and
**L*are Home?s and Foreign?s labor force. If aLC/aLW
?inside Home ?、P?、r?、W?、rchange rate of goods price and factor price PMFKTis . That is, the real income of capitalists increase, it can be shown as . 7. There are two main reasons why international trade has strong effects on the distribution of income. First, Second . 8. In the Heckscher-Ohlin model,Comparative advantage is influenced by the interaction between and
9.According to ,if the relative price of a good rises, the real income of the factor which intensively used in that good will rise, while the real income of the other factor will fall.
10.According to , at unchanged relative goods price, if the supply of a factor of production increases, the output of the good that are intensive in that factor will rise, while the output of the other good will fall.
11.According to , owners of a country?s abundant factors gain from trade, but owners of a country?s scare factors lose.
12.According to , international trade produces a convergence of relative goods prices. This convergence, in turns, causes the
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convergence of the relative factor prices. Trade leads to complete equalization of factor prices.
13. Three assumptions crucial to the prediction of factor price equalization are in
reality untrue. These assumptions are (1) (2) (3) . 14.“U.S. exports were less capital-intensive than U.S. imports” is known as . 15.The Ricardian Model , the Specific Factor model and the H-O model may be viewed as special cases of 16.The standard trade model derives a world relative supply curve from and a world relative demand curve from . 17.To export-biased growth, if the decline of the welfare caused by the deterioration of the terms of trade swap over the rise of the welfare caused by growth, the growth is .
18. Some economists argued that export-biased growth by poor nations would worsen their term of trade so much that they would be worse off than if they had not grown at all. This situation is known as .
19.Immiserizing growth demands strict conditions, these conditions are , , .
20.According to “ ”, tariffs and export subsidies might have perverse effects on internal price.
21.In the model of “Monopolistic Competition and Trade”, firms of an individual nation face the trade-off between and . 22. Marshall argued that there were three main reasons why a cluster of firms may be more efficient than an individual firm in isolation: , ,
23.The pattern of intraindustry trade itself is unpredicted, determine the details of the trade pattern.
39. When there is external economies, the pattern of international trade is determined by .
24. The indexes of intrainindustry trade of a industry can be calculated by the standard formula: I= .
25. Interindustry trade and intrainindustry trade are the sources of gains from trade . When 、 , intrainindustry trade is the dominant source of gains from trade, everyone gains from trade.
26.The argument of temporary protection of industries to enable them to gain experience is known as
27. If we add together the gains and losses from a tariff, We find the the net effect on
national welfare can be separated into two parts: and
28.Why do countries adopt trade policies such as tariff or import quota, which
produce more costs than benefits?—— 29.In the political economy of trade policy , government are assumed to maximize rather than . 2
30.Deviations from free trade can sometimes increase national welfare. These
arguments include and 31.According to “ ”, domestic market failure should be corrected by domestic policies aimed directly at the problem?s sources.
32. International trade often produces losers as well as winners. In the actual politics
of trade policy, income distribution is of crucial importance. can explain why policies that not only seem to produce more costs than benefits but that also seem to hurt far more voters them they can help can nonetheless be adopted.
33.The WTO includes four aspects content: GATT 1994, GATS, ,
34.“Nondiscriminatory” principles include principle and principle 35.For preferential trading agreements, such as , countries must cede part of their sovereignty to supranational entity.
36.Whether a customs union is desirable or undesirable depends on whether it largely leads to or .
PartⅡ. True or False (true and false are denoted by “T” and “F”,
respectively)
1.If aLW*/aLC*w/w will be produced in Foreign.( ) 3.It is precisely because the relative wage is between the relative productivities that each country ends up with a cost advantage in one good. ( ) 4.Long-run convergence in productivity produces long-run convergence in wages.
( )
5. “Korean workers earn only $2.50 an hour; if we allow Korea to export as much as it likes to the United States, our workers will be forced down to the same level. You can?t import a $5 shirt without importing the $2.50 wage that goes with it.” ( ) 6.The proposition that trade is beneficial is unqualified. That is, there is no requirement that a country be “competitive” or that the trade be “fair”. ( ) 7.Free trade is beneficial only if your country is strong enough to stand up to foreign competition. ( ) 8.Foreign competition is unfair and hurts other countries when it is based on low wages. ( ) 9.Trade exploits a country and make it worse off if its workers receive much lower wage than workers in other nations. ( ) 10.The Ricardian Model predicts an extreme degree of specialization. ( ) 11.The Ricardian Model neglects the effects on income distribution. ( ) 12.The basic prediction of the Ricardian model has been strongly confirmed by a number of studies over years. ( ) 13.The Ricardian Model predicts that countries tend to export those goods in which their productivity is relative high. ( ) 14.We can think of factor specificity as a matter of time. ( ) 15.The opportunity cost of manufacture in terms of food is denoted by MPLM /MPLF.
( )
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16.A equal proportional change in price have no real effects on the real wage, real income of capital owner and land owner. ( ) 17.Trade benefits the factor that is specific to the import-competing sectors of each country but hurts the factor to the export sectors, with ambiguous effects on mobile factors. ( ) 18.It is possible in principle for a country?s government to use taxes and subsidies to redistribute income to give each individual more of both goods. ( ) 19. Although international trade has strong effects on income distribution, there are still possible in principle to make each individual better off. ( ) 20.Typically, those who gain from trade in any particular product are a much more concentrated, informed, and organized group than those who lose. ( ) 21. Conflicts of interest within nations are usually more important in determining trade policy than conflicts of interest between nations. ( ) 22.Generally, economists do not regard the income distribution effects of trade as a good reason to limit trade. ( ) 23.The formulation of trade policy is a kind of political process. ( ) 24. “The world?s poorest countries can?t find anything to export. There is no resource that is abundant—certainly not capital or land, and in small poor nations not even labor is abundant.” ( ) 25.Wage inequality in U.S. increased between the late 1970s and the early 1990s, economists attribute the change to the growing exports of manufactured goods from NIEs. ( ) 26.If the factor-proportion theory was right, a country would always export factors for which the income share exceeded the factor share, import factors for which it was
less. ( ) 27.The H-O model can predict not only the direction but the volume of trade. ( ) 28.Factor trade in general turns out to be much smaller than the H-O model predicts.
( )
29. According to an influential recent paper, the H-O model can predict not only the direction but the volume of trade. Factor trade in general turn out to be the same as the H-O model predicts. ( ) 30. Only by dropping the Heckscher-Ohlin assumption that technologies are the same across the countries can the overall pattern of international trade be well predicted by the H-O model. ( ) 31.If a country want to maximize its national welfare, the consumption point is where the highest isovalue line is tangent to the highest reachable indifference curve. ( ) 32.A rise in the terms of trade increases a country?s welfare, while a decline in the terms of trade reduces its welfare. ( ) 33.Export-biased growth tends to improve the growing country?s terms of trade at the rest of the world?s expense. ( ) 34.If the two countries allocate their change in spending in the same proportions, there will not be a terms of trade effect. ( ) 35. If the country receiving a transfer spends a higher proportion of an increase income on its export good than the giver, a transfer raises world relative demand for the recipient?s export good and thus improve its terms of trade. ( ) 36.A transfer worsens the donor?s terms of trade if the donor has a higher mariginal
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propensity to spend on its export good than the recipient. ( ) 37.A transfer improves the donor?s terms of trade, worsens recipient?s terms of trade.
( )
38.A transfer of income——say foreign aid——could conceivably leave the recipient worse off. ( ) 39.A tariff improves Home?s terms of trade and worsens Foreign?s, while a Home export subsidy worsens Home?s terms of trade and improve Foreign?s. ( ) 40. Where there is economies of scale, there is imperfectly competitive market structure. ( ) 41.If intraindustry trade is the dominant source of gains from trade, everyone gains from trade. ( ) 42.Effect on the distribution of income within countries often weight more heavily on policy than terms of trade concerns. ( ) 43.The usual market structure in industries characterized by internal economies of scale is monopolistic competition. ( ) 44.Today, antidumping may be a device of protectionism. ( ) 45.Reciprocal dumping tends to increase the volume of trade in goods that are quite identical. ( ) 46.It is possible that reciprocal dumping increase national welfare. ( ) 47.Strong external economies tend to “locked in” the existing patterns of interindustry trade, even if the patterns are run counter to comparative advantage. ( ) 48.A trading country can conceivably lose from trade is protentially justify protectionism. ( ) 49.Like static external economies, dynamic external economies can lock in an initial advantage in an industry. ( ) 50.The stratigic trade policy is related to the model of “Monopolistic competition, differentiate products and intraindustry trade”. ( ) 51.The model “Oligopoly, homogeneous products and intraindustry trade” is first developed by Krugman and Helpman . ( ) 52.Trade in factors is very much like trade in goods, it occurs for much the same reasons and produces similar results. ( ) 53.Trade in factors is an alternative to trade in goods for the allocation of resources.
( )
54.When a country borrows, it?s intertemporal PPF is biased toward QP. ( ) 55.The relative price of future consumption goods QP is (1+r). ( ) 56.The dynamic path of TNCs? enter foreign market：FDI→Export→Licence. ( ) 57.Tariffs may have very different effects on different stages of production of a good.
( )
58.Nominal tariff reflects the effective rate of protection. ( ) 59.The costs and benefits analysis of a tariff is correct if only the direct gains to producers and consumers in a given market accurately measure the social gains. ( ) 60.The costs and benefits analysis of a tariff is correct if only a dollar?s worth of benefits to each group is the same. ( ) 61.A VER is exactly like an import quota which the license are assigned to foreign government. ( ) 62.VERS are much more costly than tariffs. ( )
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