If beginning from a free trade equilibrium the net barter terms of trade

If beginning from a free trade equilibrium the net

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6) If, beginning from a free trade equilibrium, the (net barter) terms of trade improve for a country, then it will A) B) C) D) E) None of the above. Answer: C increase production of its import competing good. increase consumption of its export good. increase the quantity of its imports. experience an export-biased shift in its production possibility frontier. Question Status: Previous Edition 10
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7) After WWI, Germany was forced to make large reparations-transfers of real income- to France. If the marginal propensity to consume was equal in both countries, and if France's demand was biased toward food (relative to Germany's demand pattern) then we would expect to find the world's relative price for food remains unchanged. the world's relative price for food increase. the world's relative price for food decrease. the world relative price for both food and non-food rise. Question Status: Previous Edition 8) If France exported manufactures, whereas Germany exported food, then the reparations from Germany to France would improve France's international terms of trade. cause France' terms of trade to deteriorate. cause both France' and Germany's terms of trade to deteriorate. cause both France' and Germany's terms of trade to improve. Question Status: Previous Edition 9) If a country lent money to another, this must lower the terms of trade of the recipient country. lower the terms of trade of both countries. improve the terms of trade of the recipient country. improve the terms of trade of the donor country. Question Status: Previous Edition 10) During the 19th Century, economic growth of the major trading countries was biased toward manufactures and away from food. The less developed countries of that time were net exporters of food. From this information, we would expect to have observed A) B) C) D) E) None of the above. 11falling terms of trade for the less developed countries. improving (rising) terms of trade for the less developed countries. no change at all in the terms of trade of the less developed countries. a decrease in the relative price of food.
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Answer: B Question Status: Previous Edition 11) Immiserizing growth could occur to a poor country experiencing export-biased economic growth. a poor country experiencing import-biased economic growth. a poor country experiencing growth in its non-traded sector. a poor country experiencing capital-intensive biased growth. Question Status: Previous Edition 12
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