STUDY UNIT 1
1. According to the Heckscher-Ohlin theory, nations heavily endowed with labor will:
import more labor intensive goods.
export more labor intensive goods.
have an absolute advantage in labor intensive goods.
have a comparative advantage in ca
STUDY UNIT 4
1. A _ involves an agreement today to buy or sell a specified amount of
a foreign currency, for delivery at a specified future date, at a rate agreed upon
foreign discount with
STUDY UNIT 6
1. Which of the following would not be advised for a nation that has experienced
difficulty in controlling inflation?
Flexible exchange rates.
A currency board.
Contractionary monetary policy.
Fixed exchange rates.
2. Flexible exchange rates
STUDY UNIT 3
1. With free trade, the supply curve faced by a small importing country will be:
2. A customs union is more likely to lead to trade creation:
the lower are the pre-union tr
STUDY UNIT 2
1. If import-competing firms expect the income of domestic consumers to increase
and they also the demand for their product to increase they would prefer:
An import quota.
An import tariff.
2. In the tariff figur
STUDY UNIT 5
1. A nation's demand curve for foreign exchange is derived from the:
foreign demand curve for the nations' exports
nation's supply curve of exports
demand and supply curves for the nations imports in terms of the
demand and s