I-Trade-EXAM09-mid - James Cook University Mid-Term Exam...

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James Cook University Mid-Term Exam Paper Subject Number: BX3021/EC5208 Subject Name: International Trade Date: 17 April 2009 Time: 3:00 pm – 4:50 pm Writing Time Allowed: One hundred (100) minutes Reading Time: Ten (10) minutes
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PART A: MULTIPLE CHOICE QUESTIONS Answer all the 10 questions. Each question is worth 0.5 marks. 5 marks total. Record your answers in the table below: Question Answer Question Answer 1 6 2 7 3 8 4 9 5 10 1. International trade forces domestic firms to become more competitive in terms of: a. The introduction of new products b. Product design and quality c. Product price d. All of the above Table A.1 Terms of Trade Export Price Index Import Price Index Country 1990 2004 1990 2004 Mexico 100 220 100 200 Sweden 100 160 100 150 Spain 100 155 100 155 France 100 170 100 230 Denmark 100 120 100 125 2. Referring to the above table, which country’s (or countries') terms of trade improved between 1990 and 2004? a. Mexico and Denmark b. Sweden and Denmark c. Sweden and Spain d. Mexico and Sweden 3. The export-led growth explains comparative advantage as the result of differences in countries': a. Economies of large-scale production b. Relative abundance of various resources c. Relative costs of labor d. Research and development 2
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4. The imposition of tariffs on imports results in deadweight welfare losses for the home economy. These losses consist of the: a. Protective effect plus consumption effect b. Redistribution effect plus revenue effect c. Revenue effect plus protective effect d. Consumption effect plus redistribution effect 5. When a government allows raw materials and other intermediate products to enter a country duty free , its tariff policy generally results in a: a. Effective tariff rate less than the nominal tariff rate b. Nominal tariff rate less than the effective tariff rate c. Rise in both nominal and effective tariff rates d. Fall in both nominal and effective tariff rates 6. Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad. The export revenue of these firms would rise
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I-Trade-EXAM09-mid - James Cook University Mid-Term Exam...

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