Chap002

Chap002 - Chapter 02 Early Trade Theories Mercantilism and...

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Chapter 02 - Early Trade Theories: Mercantilism and the Chapter 02 Early Trade Theories: Mercantilism and the Multiple Choice Questions 1. During the price-specie-flow adjustment process to a trade imbalance, if demands for goods are inelastic, then, when the price level __________ in the country with the trade deficit, the value of that country's exports will __________ as the price-specie-flow process takes place. a. Falls; increase B . Falls; decrease c. Rises; increase d. Rises; decrease 2. In the price-specie-flow doctrine, a deficit country will __________ gold, and this gold flow will ultimately lead to __________ in the deficit country's exports. a. Lose; a decrease B . Lose; an increase c. Gain; a decrease d. Gain; an increase 3. According to the labor theory of value, a. The value of labor is determined by its value in production b. The value of a good is determined by the amount of labor with which each unit of capital in an industry works C . The price of a good A compared to the price of good B bears the same relationship as the relative amounts of labor used in producing each good d. The values of two minerals such as coal and gold with similar production costs may be very different 2-1
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Chapter 02 - Early Trade Theories: Mercantilism and the 4. In the Mercantilist view of international trade (in a two-country world), a. Both countries could gain from trade at the same time, but the distribution of the gains
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This note was uploaded on 11/27/2009 for the course ECON 421 taught by Professor Macphee,c during the Spring '08 term at UNL.

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Chap002 - Chapter 02 Early Trade Theories Mercantilism and...

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