7 Written questions
6 Multiple choice questions
- The gains from trade that occur over time because trade causes an increase in a country's economic growth or induces greater efficiency in the use of existing resources.
- A country has a comparative advantage in (and will export) that good which is intensive in the use of that country's abundant resource.
- Financial assets including, stocks, bonds, deposits, and currencies.
- the situation where a country has a high capital-to-labor ratio relative to another country.
- Dissimilar good with different factor intensities are lumped together in trade statistics.
- are demonstrated by showing that each country moves to a higher CIC. OR, by showing that both countries can have higher levels of consumption of both goods.
6 True/False questions
Explanations for Intra-industry trade → Production is spread around the world with various countries producing components that are assembled and sold around the world. Each country specializes in a particular component in order to gain economies of large scale production.
Explanations for Intra-industry trade → Different countries produce different varieties of the same product to sell to consumers in various countries with differences in preferences.
Foreign Direct Investment (FDI) → A corporation's purchase of real assets, such as production facilities and equipment, in a foreign country.
The importance of being unimportant → the smaller of two trading economies receives the greatest gains from trade.
Trade benefits both trading countries
Gains due to differences in absolute advantage between countries.
Portfolio Investment → Financial assets including, stocks, bonds, deposits, and currencies.
The Index of Openness → are demonstrated by showing that each country moves to a higher CIC. OR, by showing that both countries can have higher levels of consumption of both goods.