International Economics Questions

The relative price of a unit of cloth in the small isolated country of Moribundia is 5 units of food. When the central city, Mudhole, puts in an airstrip, the country is able to engage in trade. If the relative price of cloth in the outside world is 8 units of food, then Moribundia will export ______ and ______ factors used in the production of ______ will benefit.

In the specific factors model, a country's PPF is ______ because of ______

Suppose a specific factors economy produces two​ goods: F and C. Given that the economy is open to​ trade, and assuming that D is​ consumption, Q is​ production, and P is​ price, the budget constraint can be defined as

One way in which the HO model differs from the Ricardo model of comparative advantage is by assuming that ______ is identical in all countries

In the HO model, comparative advantage is influence by the interaction between nations' resources, called ______, and the technology of production, called ______, used in the production of different goods

If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian gov't should

A factor of production that cannot be used outside of a particular sector of an economy is a

The effect of a relative price change on the distribution of income can be stated as followed EXCEPT

Ignoring risk differences, if we observe American investors purchasing foreign bonds when the U.S. interest rate is above the foreign interest rate, we could assume that:

When a country's labor market is in equilibrium in the specific factors model, the wage rate

Considering the theory of purchasing power parity, if inflation in Mexico is 5% while prices in the U.S. are stable; we should expect over the period of a year:

A decrease in Americans' preference for foreign goods will lead to the following in the foreign exchange market:

a tax on an import (aka customs duties). Tariffs may be imposed to obtain revenue or to protect domestic firms. There are two types of tariffs; their names are derived from their purpose:

is usually applied to a product that is not being produced domestically.

is a trade barrier by which foreign firms "voluntarily" limit the amount of their exports to a particular country.

a limit on the quantity of a good that may be imported in a given time period.

Concrete likely does not follow the law of one price due to:

Considering the euro/U.S. dollar exchange rate, as a U.S. dollar increases in value versus the euro (holding other factors constant):

The theory of purchasing power parity implies the real exchange rate between two countries is:

If Americans develop a greater appreciation for Mexican-made goods, we should observe the following change(s) in the dollar-peso market: