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7 Written questions

6 Multiple choice questions

  1. The economic doctrine that contends a country's wealth is determined by its holdings of precious metals and espouses trade policies that promote the accumulation of gold and silver.
    *The school of thought that advocated policies designed to generate trade surpluses, so as to increase a country's holdings of gold.
  2. The acquisition of portfolio capital. Usually refers to such transactions across national borders and/or across currencies.
  3. 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.
  4. A country has a comparative advantage in the production of a good if the relative cost (opportunity cost) of producing that good is lower than that of its trading partner.
  5. the situation where a country has a high capital-to-labor ratio relative to another country.
  6. Occurs when a country imports and exports the same good.

6 True/False questions

  1. Portfolio CapitalThe acquisition of portfolio capital. Usually refers to such transactions across national borders and/or across currencies.

          

  2. Dynamic Gains from Tradeare 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.

          

  3. 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.

          

  4. Explanations for Intra-industry tradeOccurs when a country imports and exports the same good.

          

  5. Gains from tradeare 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. The Heckschler-Ohlin ModelThe ratio of a country's exports divided by its GDP.