国际经济学作业答案-第五章

Chapter5TheStandardTradeModel

■MultipleChoiceQuestions

1.Theconcept“termsoftrade"means

(a)theamountofexportssoldbyacountry.

(b)thepriceconditionsbargainedfbrininternationalmarkets.

(c)thepriceofacountry'sexportsdividedbythepriceofitsimports.

(d)thequantitiesofimportsreceivedinfreetrade.

(e)Noneoftheabove.

Answer:C

2.Acountrycannotproduceamixofproductswithahighervaluethanwhere

(a)theisovaluelineintersectstheproductionpossibilityfrontier.

(b)theisovaluelineistangenttotheproductionpossibilityfrontier.

(c)theisovakielineisabovetheproductionpossibilityfrontier.

(d)theisovaluelineisbelowtheproductionpossibilityfrontier.

(e)theisovaluelineistangentwiththeindifferencecurve.

Answer:B

3.Tastesofindividualsarerepresentedby

(a)theproductionpossibilityfrontier.

(b)theisovalueline.

(c)theindifferencecurve.

(d)theproductionfiinction.

(c)Noneoftheabove.

Answer:C

4.IfPC/PFweretoincreaseintheinternationalmarketplace,then

(a)allcountrieswouldbebetteroff.

(b)thetermsoftradeofclothexportersimprove.

(c)thetermsoftradeoffoodexportersimprove.

(d)thetermsoftradeofallcountriesimprove.

(e)Noneoftheabove

Answer:B

5.IfPc/Prwcrctoincrease,

(a)theclothexporterwouldincreasethequantityofclothexports.

(b)theclothexporterwouldincreasethequantityofclothproduced.

(c)thefoodexporterwouldincreasethequantityoffoodexports.

(d)Both(a)and(c).

(e)Noneoftheabove.

Answer:B

6.IfPC/PFweretoincrease,

(a)worldrelativequantityofclothsuppliedanddemandedwouldincrease.

(b)worldrelativequantityofclothsuppliedanddemandedwoulddecrease.

(c)worldrelativequantityofclothsuppliedwouldincreases.

(d)worldrelativequantityofclothdemandedwoulddecrease.

(e)Noneoftheabove.

Answer:C

7.Whentheproductionpossibilityfrontiershiftsoutrelativelymoreinonedirection,wehave

(a)biasedgrowth.

(b)unbiasedgrowth.

(c)immiscrizinggrowth.

(d)balancedgrowth.

(e)imbalancedgrowth.

Answer:A

8.Export-biasedgrowthinCountryHwill

(a)improvethetermsoftradeofCountryH.

(b)triggeranti-biasregulationsoftheWTO.

(c)worsenthetermsoftradeofCountryF(thetradepartner).

(d)improvethetermsoftradeofCountryF.

(e)decreaseeconomicwelfareinCountryH.

Answer:D

9.Immiscrizinggrowthis

(a)likelytooccuriftheexportingcountryispoor.

(b)likelytooccuriftheexportingcountryisrich.

(c)likelytooccurwhentermsoftradechange.

(d)likelytooccurifrelativesuppliesareelastic.

(e)Noneoftheabove.

Answer:E

10.IftheU.S.AgencyforInternationalDevelopmenttransfersfiindstopoorcountriesinSub-Saharan

Africa,thismust

(a)worsentheU.S.termsoftrade.

(b)improvetheU.S.termsoftrade.

(c)worsenthetermsoftradeoftheAfricanaidrecipients.

(d)improvethetermsoftradeoftheAfricanaidrecipients.

(e)Noneoftheabove.

Answer:E

11.IfthepoorUSAIDrecipientcountrieshaveahighermarginalpropensitytoconsumeeachandevery

productthandocstheUnitedStates,thensuchaidwill

(a)worsentheU.S.termsoftrade.

(b)improvetheU.S.termsoftrade.

(c)leavetheworldtermsoftradeunaffected.

(d)worsenthetermsoftradeofbothdonorandrecipientcountries.

(e)Noneoftheabove.

Answer:B

12.IftheU.S.hasahighermarginalpropensitytoconsume(MPC)importsascomparedtobothits

MPCforexportablesandnontradables,thensuchaidwill

(a)worsentheU.S.termsoftrade.

(b)improvetheU.S.termsoftrade.

(c)leavetheworldtermsoftradeunaffected.

(d)worsenthetermsoftradeofbothdonorandrecipientcountries.

(e)Noneoftheabovs.

Answer:B

13.IftheU.S.(alargecountry)imposesatariffonitsimportedgood,thiswilltendto

(a)havenoeffectontermsoftrade.

(b)improvethetermsoftradeofallcountries.

(c)improvethetermsoftradeoftheUnitedStates.

(d)causeadeteriorationofU.S.termsoftrade.

(e)raisetheworldpriceofthegoodimportedbytheUnitedStates.

Answer:C

14.IftheU.S.(alargecountry)imposesatariffonitsimportedgood,thiswill

(a)havenoeffectoneconomicwelfare.

(b)improvethetermsoftradeofallcountries.

(c)improvetheeconomicwelfareoftheUnitedStates.

(d)harmtheeconomicwelfareofU.S/tradingpartners.

(e)Noneoftheabov?

Answer:D

15.Acountrywillbeabletoconsumeabundlewhichisnotattainablesolelyfromdomesticproduction

onlyif

(a)theworldtermsoftradedifferfromitsdomesticrelativecosts.

(b)thecountryspecializesinoneproduct.

(c)thecountryavoidsinternationaltrade.

(d)theworldtermsoftradeequalthedomesticrelativecosts.

(e)Noneoftheabove.

Answer:A

16.Termsoftraderefersto

(a)whatgoodsareimported.

(b)whatgoodsarcexported.

(c)thevolumeoftrade.

(d)thepricesatwhichtradeoccurs.

(e)Noneoftheabove.

Answer:D

17.Ifacountry's(net-barter)termsoftradeincrease("improve")weknowfromthisthateconomic

welfareinthiscountry

\

/a1

V7increases

bX

)increases,butonlyrelativetothatofitstradepartners

z\

(c

\7isunchanged

/d\

(!

V/decreases

/\

(eJ

\7Noneoftheabove

Answer:E

18.Ifpointsaandbarebothontheproductionpossibilityfrontierofacountry,then

(a)consumersarcindifferentbetweenthetwobundles.

(b)producersarcindifferentbetweenthetwobundles.

(c)atanypointintime,thecountrycouldproduceboth.

(d)Bothcostthesame.

(e)Thecountrycouldproduceeitherofthetwobundles.

Answc匚E

19.Iftheeconomyisproducingatpointaonitsproductionpossibilityfrontier,then

(a)allofthecountry'sworkersarespecializedinoneproduct.

(b)allofthecounty'scapitalisusedfbroneproduct.

(c)allofthecounty'sworkersarcemployed.

(d)allofitscapitalisused,butnotefficiently.

(e)Noneoftheabove.

Answer;C

20.IfatpointAontheproductionpossibilityfrontier,andthecommunityindifferencecurvecuts

throughpointafromnorthwesttosoutheast,thentheoptimalautarkyproductionbundleis

(a)atpointA.

(b)totherightofpointA.

(c)totheleftofpointA.

(d)tothenortheastofpointA.

(e)tothesouthwestofpointA.

Answer:B

21.Abundleindicatedbyapointtothenorthcastoftheproductionpossibilityfrontieris

(a)unattainableatapointintime.

(b)unattainableatapointintimewithoutinternationaltrade.

(c)unattainableatapointintimewithoutdomestictrade.

(d)unattainableasaconsumptionpoint.

(e)Noneoftheabove.

Answer:B

22.Iftwocountrieswithdiminishingreturnsanddifferentmarginalratesofsubstitutionbetweentwo

productsweretoengageintrade,then

(a)theshapesoftheirrespectiveproductionpossibilityfrontierswouldchange.

(b)themarginalratesofsubstitutionofbothwouldbecotncequal.

(c)thelargerofthetwocountrieswoulddominatetheirtrade.

(d)thecountrywithrelativelyelasticsupplieswouldexportmore.

(e)Noneoftheabove.

Answer:B

23.IfacountrybeganexportingproductAandimportingproductB,then,ascomparedtotheautarky

(no-trade)situation,themarginalcostofproductAwill

(a)increase.

(b)decrease.

(c)shiftoutward.

(d)shiftinward.

(e)Noneoftheabove.

Answer:A

24.beginningfromafreetradeequilibrium,the(netbarter)termsoftradeimproveforacountry,

thenitwill

(a)increaseproductionofitsimportcompetinggood

(b)increaseconsumptionofitsexportgood.

(c)increasethequantityofitsimports.

(d)experienceanexport-biasedshiftinitsproductionpossibilityfrontier.

(e)Noneoftheabove.

Answer:C

25.Ifasmallcountryweretolevyatariffonitsimportsthenthiswould

(a)havenoeffectonthatcountry'seconomicwelfare.

(b)increasethecountry'seconomicwelfare.

(c)decreasethecountry'seconomicwelfare.

(d)changethetermsoftrade.

(e)Noneoftheabove.

Answer:C

26.Anincreaseinacountry'snetcommoditytermsoftradewillalways

/a\

V71increasethecountry'seconomicwelfare.

b\

/!increasethecountry'srealincome.

zc

\(increasethecountry'squantityofexports.

/dK

Y(/)increasethecountry'sproductionofitsimportcompetinggood.

e\

ZJNoneoftheabove.

Answer:E

27.AfterWWI,Germanywasforcedtomakelargereparations—transfersofrealincome-toFrance.If

themarginalpropensitytoconsumewasequalinbothcountries,andifFrance'sdemandwasbiased

towardfood(relativetoGermany'sdemandpattern)thenwcwouldexpecttofind

(a)thewordsrelativepriceforfoodremainsunchanged.

(b)theworld'srelativepriceforfoodincrease.

(c)theworld'srelativepriceforfooddecrease.

(d)theworldrelativepricefbrbothfoodandnon-fbodrise.

(e)Noneoftheabove.

Answer:B

28.IfweaddtoQuestion27thatFranceexportedmanufactures,whereasGermanyexportedfood,then

thereparationsfromGermanytoFrancewould

(a)improveFrance'sinternationaltermsoftrade.

(b)causeFrance*termsoftradetodeteriorate.

(c)causebothFrance'andGermany'stermsoftradetodeteriorate.

(d)causebothFrance,andGermany'stermsoftradetoimprove.

(e)Noneoftheabove.

Answer:B

29.Ifacountrylentmoneytoanother,thismust

(a)lowerthetermsoftradeoftherecipientcountry.

(b)lowerthetennsoftradeofbothcountries.

(c)improvethetermsoftradeoftherecipientcountry.

(d)improvethetermsoftradeofthedonorcountry

(e)Noneoftheabove.

Answer:E

30.Duringthe19thCentury,economicgrowthofthemajortradingcountrieswasbiasedtoward

manufacturesandawayfromfood.Thelessdevelopedcountriesofthattimewerenetexportersof

food.Fromthisinformation,wewouldexpecttohaveobserved

(a)fallingtermsoftradeforthelessdevelopedcountries.

(b)improving(rising)termsoftradeforthelessdevelopedcountries.

(c)nochangeatallinthetermsoftradeofthelessdevelopedcountries.

(d)adecreaseintherelativepriceoffood.

(e)Noneoftheabove.

Answer:B

31.Immiscrizinggrowthcouldoccurto

(a)apoorcountryexperiencingexport-biasedeconomicgrowth.

(b)apoorcountryexperiencingimport-biasedeconomicgrowth.

(c)apoorcountryexperiencinggrowthinitsnon-tradedsector.

(d)apoorcountryexperiencingcapital-intensivebiasedgrowth.

(e)Noneoftheabove.

Answer:A

32.Alargecountryexperiencingimport-biasedeconomicgrowthwilltendtoexperience

(a)positivetermsoftrade.

(b)deterioratingtermsoftrade.

(c)improvingtermsoftrade.

(d)immiserizingtermsoftrade.

(e)Noneoftheabove.

Answer:C

33.IntheperiodprecedingtherecentFinancialCrisisinAsia,theSouthEastAsiancountrieswere

receivinglargeinflowsoffinancialcapital.FollowingJohnMaynardKeynes'theory,thisshould

havecaused

(a)aglutintheirbankingassetsituation.

(b)animprovementintheirtermsoftrade.

(c)deteriorationintheirtermsoftrade.

(d)afluctuationupwardandthendownwardintheir:ermsoftrade.

(e)Noneoftheabove.

Answer:B

34.IfSloveniaisasmallcountryinworldtradeterms,thenifitimposesalargeseriesoftariffson

manyofitsimports,thiswould

(a)havenoeffectonitstermsoftrade.

(b)improveitstermsoftrade.

(c)deteriorateitstermsoftrade.

(d)decreaseitsmarginalpropensitytoconsume.

(e)Noneoftheabove.

Answer:A

35.IfSloveniaisalargecountryinworldtrade,thenifitimposesalargesetoftariffsonmanyofits

imports,thiswould

(a)havenoeffectonitstermsoftrade.

(b)improveitstermsoftrade.

(c)deteriorateitstermsoftrade.

(d)decreaseitsmarginalpropensitytoconsume.

(e)Noneoftheabove.

Answer:B

36.IfSloveniawerealargecountryinworldtrade,thenifitimposesalargesetoftariffsonitsimports,

thismust

(a)causeretaliationonthepartofitstradepartners.

(b)harmSlovenia'srealincome.

(c)improveSlovenia'srealincome.

(d)improvetherealincomeofitstradepartners.

(e)Noneoftheabove.

Answer:E

37.IfSloveniawerealargecountryinworldtrade,thenifitinstitutedalargesetofsubsidiesfbrits

exports,thismust

(a)havenoeffectonitstermsoftrade.

(b)improveitstermsoftrade.

(c)deteriorateitstermsoftrade.

(d)decreaseitsmarginalpropensitytoconsume.

(e)Noneoftheabove.

Answer:C

38.IfSloveniawerealargecountryinworldtrade,thenifitinstitutedalargesetofsubsidiesfbrits

exports,thismust

(a)causeretaliationonthepartofitstradepartners.

(b)harmSlovenia'srealincome.

(c)improveSlovenia'srealincome.

(d)improvetherealincomeofitstradepartners.

(e)Noneoftheabove.

Answer:D

39.IftheUnitedStatesexportsskilled-laborintensiveproductsandservices,thenweshouldexpect

unionsrepresentingskilledlaborto

/\

aJ

V7lobbyinfavoroftariffs.

(bX

X)lobbyagainsttheimpositionoftariffs.

/oX

(I

V/

dbeindifferenttotheissueoftariffs.

z

(

elobbyinfavorofimprovedtermsoftrade.

\

l

zNotenoughinformation.

Answer:E

AO.IftheUnitedStatesexportsskilled-laborintensiveproductsandservices,thenweshouldexpect

unionsrepresentingunskilledlaborto

(a)lobbyinfavoroftariffs.

(b)lobbyagainsttheimpositionoftariffs.

(c)beindifferenttotheissueoftariffs.

(d)lobbyinfavorofimprovedtermsoftrade.

(e)Notenoughinfbnnation.

Answer:B

41.Ifatherearcnointernationalloansorcapitalflows,thenifacountry'stermsoftradeimprove,we

wouldfindthat

(a)thevalueofitsexportsexceedsthevalueofitsimports.

(b)thevalueofitsexportsbecomeslessthanthatofitsimports.

(c)thevalueofitsexportsexactlyequalsthatofitsimports.

(d)thequantityofitsexportsequalsthatofitsimports.

(e)Noneoftheabove.

Answer:C

42.IftheU.S.AgencyfbrInternationalDevelopmenttransfersfimdstopoorcountriesinSub-Saharan

Africa,theconventionalassumption,followingKeynes'analysiswouldpresumethatthiswould

tendto

(a)worsentheU.S.termsoftrade.

(b)improvetheU.S.termsoftrade.

(c)worsenthetermsoftradeoftheAfricanaidrecipients.

(d)improvethetermsoftradeoftheAfricanaidrecipients.

(e)Noneoftheabove.

Answer:A

■EssayQuestions

1.Otherthingsbeingequal,ariseinacountry'stermsoftradeincreasesitswelfare.Whatwould

happenifwerelaxtheceterisparibusassumption,andallowfbrthelawofdemandtooperate

internationally?

Answer:Letusassumethatthetermsoftrade(ortechnicallythenetcommoditytermsoftrade)

improve,thustherelativepriceofacountry'sexportsincrease.Thiswould,logically,lead

toashiftav/aybyworldconsumerstosubstitutegoods.Ifthedemandfbracountry's

exportsisclastic,thequantitydecreasewouldbeproportionallylargerthan:heperunit

priceincrease.Thistermoftradeeffectwouldactuallylowerthecountry'srealincome

andeconomicwelfare.

2.Ifacountry'sgrowthisbiasedinfavorofitsimport,thisshouldunequivocallyimproveitstermsof

tradeanditseconomicwelfare.Discuss.

Answer:SupposeJapanexperienceseconomicgrowthbiasedinfavorofitsimportsubstitutes.For

example,assumethatJapanimportscomponentsandexportsfinalgoods,butthatit

experiencesamajorgrowthinitscomponentsmanufacturesector.SinceJapanis

internationallyalargecountryinthesemarkets,thiswouldtendtohurtitscomponent

supplier'stermsoftrade(andhelpJapan's).However,suchabiasineconomicgrowth

maytendtolessenthevolumeofinternationaltrade.Atanextreme,Japanmaybecomean

exporterofcomponentsandanimporteroffinalgoods.Iftheresultisalesseningof

specializationandofthevolumeoftrade,thenthiseffectwilllowerJapan'swelfare

associatedwithgainsfromtrade.Ifanactualchangeinthepatternofcomparative

advantageoccurs(apossibility)thismaycausedynamicdislocationswhoseharm

overpowersstaticgainsfbrarelativelylongperiodoftime.

3.Itisimpossiblefbreconomicgrowthinasmallcountrytolowerthatcountry'seconomicwelfare,

regardlessofthebiasofthegrowth.Explain.

Answer:Thisisatruestatement.Thereasoneconomicgrowthmayhurtacountryisifthetermsof

tradeeffectcountersanddominatesthegrowtheffec*.Inthecaseofthesmallcountry

thereisnotermsoftradeeffect.

4.AttheconclusionofWorldWarI,Germany,asapunishment,wasobligedtomakealargetransfer

toFranceintheformofreparations.Isitpossiblethattheactualreparationsmayhaveimproved

Germany'seconomicwelfare?

Answer:Sucharesultisnotlikely.However,theoretically,ifFrance'sincomeelasticityofdemand

fbrGermany'sexportswashigherthanGermany'sincomeelasticityofdemandfbrits

ownexportable,thentherealincometransferassociatedwiththesereparationsmayhave

improvedGermany'stermsoftrade,andimproveditsbalanceofpayments,thushelping

GermanyinmannerunanticipatedintheTreatyofVerssaille.Explain.

5.Anexportsubsidyhastheoppositeeffectontermsoftradetotlieeffectofanimporttariff.

Domesticallyatariffwillraisethepriceoftheimportgood,deterioratingthedomestictermsof

trade.Aproductionsubsidyfortheexportproductwilllowerthelocalpriceoftheexportgood,

loweringthedomestictermsoftradefbrthecountry.Hencetheexportsubsidyandtheimporttariff'

havethesameeffect.Thisanalysisseemstocontradictthefirstsentenceinthisparagraph.Discuss

thisparadox.

Answer:Whilethis(Lerner)equivalencemaywelloccurdomestically,internationallythetariff

willimproveacountry^termsoftrade.Anexportsubsidyontheotherhandwillinfact

lowertheintematioralpriceofthe(nowreadilyavailable)exportgood,hencehurtinga

country'stermsoftrade.

6.Ifacountry'snetbartertermsoftradeimprove(increase),itispossiblethatthiscoulddecreasethe

valueofitsexportsdemanded,andhenceharmitseconomicwelfare.Discussthispossibility.What

alternativemeasurefbr“termsoftrade^^doesthissuggest?

Answer:An"improvement”inthetermsoftradeoccurswhenthepriceofacountry'sexportsrises

bymorethanthepriceofitsimports.Ifdemandfbrthiscountry'sexportsisinelastic,then

thiscoulddecreasedemandfbritsexportsintheworld.Thisistreatedunderthetopicsof

theMarshal-Lcrncrconditionsfbrtheeffectsofadepreciationonthebalanceofpayments

Thissuggeststhatwsmaywishtousesomekindof“incometermsoftrade,vthewould

explicitlyconsiderbothchangesinrelativetradcablcsprices,andalsoquantitiesofexport

(thelatternotdealtwithbythenetbartertermsoftrade).

■Quantitative/GraphingProblems

1.Albaniarefiisedtoengageininternationaltradeforideologicalreasons.Tomaximizeitseconomic

welfareitwouldchoosetoproduceatwhichpointinthediagramabove?SupposethePA/PBatpoint

awasequallu1.Giventhisinluniialiun,inwhichgood(AorB)duesAlbaniaenjoyacomparative

advantage?

NowthattheColdWarisover,Albaniaisinterestedinobtainingeconomicwelfaregainsfromtrade.

TherelevantinternationalrelativepriceisPA/PB=2.Albaniawouldthereforechoosetoproduceat

whichpoint(a,b,orc)?Giventhisadditionalinformation,inwhichgooddocsAlbaniaenjoya

comparativeadvantage?

Answer:AlbaniawouldchoosetoproduceatpointaWithnoreferencetoworldtermsoftrade,

onecannotestablishAlbania'scomparativeadvantage.

Later,whenAlbaniadiscoversthattherelativepriceofAequalstwicethepriceofB,it

knowsthatithasacomparativeadvantageinA.ThereforeAlbaniawouldproduceat

productionpointb.

2.Now,supposethattherelativepriceofAisactuallynothigherthanAlbania'sautarkiclevelof1,

butquitetheopposite(e.g.PA/PB=0.5).WouldAlbaniastillbeabletogainfromtrade?Ifso,where

wouldbeitsproductionpoint?Giventheinformationinthisquestion,whereisAlbania's

comparativeadvantage?

Answer:Yes.Aslongastheworld'stennsoftradedifferedfromthoseofAlbania,thatcountry

standstogainfrominternationaltrade.Inthisparticularcase,itspointofproductionwith

tradewouldbeatpointc.

A

3.Suppose,asaresultofvariousdynamicfactorsassociatedwithexposuretointernational

competition,Albania'seconomygrew,andisnowrepresentedbytherightmostproduction

possibilityfrontierintheFigureabove.Ifitspointofproductionwithtradewaspointc,wouldyou

considerthisgrowthtobeexport-biasedorimportbiased?IfAlbaniawerealargecountry'with

respecttotheworldtradeofAandD,howwouldthisgrowthaffectAlbania'stennsoftrade?Its

realincome?

Answer:Ifpointcistheproductionpointwithtrade,thenAlban