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1 | |
Changes in a country's terms of trade can be |
| | A) | conveniently analyzed using the offer curve framework. |
| | B) | sizeable, according to a recent study by Cashion and Pattillo. |
| | C) | sizeable, according to a recent study by the IMF. |
| | D) | all of the above. |
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2 | |
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Use the following diagram to answer Questions 2 - 4. |
| | A) | X; also X |
| | B) | X; Y |
| | C) | Y; X |
| | D) | Y; also Y |
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3 | |
If the terms of trade are given by the slope of the line marked TOT2, on the international market there will be |
| | A) | an excess demand for good X and an excess supply of good Y. |
| | B) | an excess demand for both X and Y. |
| | C) | an excess demand for good Y and an excess supply for good X. |
| | D) | none of the above. |
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4 | |
If the terms of trade are given by the slope of the line marked TOT1, |
| | A) | Country A will be willing to export more of good X than Country B is willing to import. |
| | B) | Country A will be willing to export more of good Y than Country B is willing to import. |
| | C) | Country B will be willing to export exactly the same amount of good X that Country A is willing to import. |
| | D) | Country B will be willing to import exactly the same amount of good X that Country A is willing to export. |
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5 | |
Use the following diagram to answer Questions 5 and 6.
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Which of the following would not cause a shift of B's offer curve from OCB to OC'B? |
| | A) | the imposition of an import tariff levels by Country B |
| | B) | a decreased interest in imported products |
| | C) | an increase in the country's income |
| | D) | All of the above would cause such a shift. |
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6 | |
Which of the following could cause a shift of A's offer curve from OCA to OC'A? |
| | A) | a lowering of import tariff levels by Country A |
| | B) | a decreased interest in imported products |
| | C) | a decrease in the country's income |
| | D) | all of the above |
| | E) | a and c |
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7 | |
If country I experiences an increase in the productivity in its export industry, we would expect (assuming both countries are operating on the elastic portions of their offer curves) |
| | A) | a decrease in the volume of trade and a deterioration of Country I's terms of trade. |
| | B) | an increase in the volume of trade and a deterioration of Country I's terms of trade. |
| | C) | a decrease in the volume of trade and an improvement of Country I's terms of trade. |
| | D) | an increase in the volume of trade and an improvement of Country I's terms of trade. |
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8 | |
If Country I becomes less interested in international trade while Country II simultaneously becomes more interested, we would expect (assuming both countries are operating on the elastic portions of their offer curves) |
| | A) | a decrease in the volume of trade and a deterioration of Country I's terms of trade. |
| | B) | an increase in the volume of trade and a deterioration of Country I's terms of trade. |
| | C) | an ambiguous change in the volume of trade and an improvement of Country I's terms of trade. |
| | D) | an ambiguous change in the volume of trade and a deterioration of Country I's terms of trade. |
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9 | |
Suppose that at the point of intersection, the offer curve of Country I is elastic, but the offer curve of Country II is inelastic. In this situation, a tariff imposed by Country I will lead to |
| | A) | a deterioration of I's terms of trade, but an increase in the volume of I's exports. |
| | B) | an improvement in I's terms of trade, but an increase in the volume of I's exports. |
| | C) | a deterioration of I's terms of trade, but a decrease in the volume of I's exports. |
| | D) | an improvement in I's terms of trade, but a decrease in the volume of I's exports. |
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10 | |
The commodity terms of trade of industrial countries |
| | A) | fell in the 1970s, but rose from 1980 to 1995. |
| | B) | rose in the 1970s, but fell from 1980 to 1995. |
| | C) | rose in the 1970s and also rose from 1980 to 1995. |
| | D) | fell in the 1970s and also fell from 1980 to 1995. |
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