chapter 7 - Chapter 7: International Factor Movements...

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Chapter 7: International Factor Movements Multiple Choice Questions 1. Which of the following differs in its essential analytical framework? 2. International trade in goods 3. International conflict resolution 4. International trade in services 5. International trade in factors of production 6. International borrowing and lending Answer: B 2. The slope of the production function measures A. the physical increase in output as country grows. B. the dollar-value increase in output as a country grows. C. the increase in number of workers as immigration proceeds. D. the marginal product of labor. E. the marginal product of capital. Answer: D 3. International free labor mobility will under all circumstances A. increase total world output. B. improve the economic welfare of everyone. C. improve the economic welfare of workers everywhere. D. improve the economic welfare of landlords (or capital owners) everywhere. E. None of the above. Answer: E 4. If the world attained a perfect Heckscher-Ohlin model equilibrium with trade, then A. workers in the labor abundant country would migrate to the capital abundant country. B. workers in the labor abundant country would wish to migrate to the capital abundant country.
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C. workers in the labor abundant country would have no desire to migrate to the capital abundant country. D. workers in the capital abundant country would wish to migrate to the labor abundant country. E. workers in the capital abundant country would migrate to the labor abundant country. Answer: C 5. During the mass migration period of late 19 th -early 20 th centuries, A. wages rose in the origin countries and fell in the destination countries. B. wages fell in the origin countries and rose in the destination countries. C. wages generally rose faster in the origin countries. D. wages generally rose faster in the destination countries. E. wages generally fell faster in the origin countries. Answer: C 6. International borrowing and lending may be interpreted as one form of A. intermediate trade. B. inter-temporal trade. C. trade in services. D. unrequited international transfers. E. None of the above. Answer: B 7. The relative price of future consumption is A. the interest rate. B. unknown at any given time. C. the real interest rate. D. the relative interest rate. E. None of the above. Answer: C
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8. A country that has a comparative advantage in future production of consumption goods A. will tend to be an international borrower. B. will tend to have low real interest rates. C. will tend to be an international investor or lender. D. will tend to have good work ethics. E. None of the above. Answer: A 9. A U.S. multinational corporation I. has a controlling share in a foreign subsidiary and is not itself foreign controlled. J.
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chapter 7 - Chapter 7: International Factor Movements...

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