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7 Written questions

6 Multiple choice questions

  1. 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.
  2. A country has a comparative advantage in (and will export) that good which is intensive in the use of that country's abundant resource.
  3. Financial assets including, stocks, bonds, deposits, and currencies.
  4. the situation where a country has a high capital-to-labor ratio relative to another country.
  5. Dissimilar good with different factor intensities are lumped together in trade statistics.
  6. 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

  1. Explanations for Intra-industry tradeProduction 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.

          

  2. Explanations for Intra-industry tradeDifferent countries produce different varieties of the same product to sell to consumers in various countries with differences in preferences.

          

  3. Foreign Direct Investment (FDI)A corporation's purchase of real assets, such as production facilities and equipment, in a foreign country.

          

  4. The importance of being unimportantthe 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.

          

  5. Portfolio InvestmentFinancial assets including, stocks, bonds, deposits, and currencies.

          

  6. The Index of Opennessare 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.

          

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