LDCs often have a comparative advantage in the production of ? A. primary products B. intermediate products C. manufactured products D. financial services

Output fell sharply in the transition economies because ? A. banks were unable to function B. there was little corporate control C. vital infrastructure was missingD. All of the above

If goods are exported for less than society’s marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from? A. an import subsidy B. a quota C. comparative advantageD. an export subsidy

A tariff causes domestic firms to ________ and consumers to? A. overproduce, under consume B. Overproduce, overconsume C. underproduce, under consume D. underproduce, overconsume

The level of the equilibrium exchange rate offsets international differences in ? A. comparative advantageB. absolute advantage C. opportunity cost D. relative costs

International difference is opportunity costs lead to countries acquiring ? A. Comparative advantage B. High exchange rates C. trade barriers D. trade quotas

To prevent the external value of the currency from falling the government might ? A. Reduce interest rates B. Sell its own currencyC. Buy its own currency with foreign reserves D. Increase its own spending

The marginal propensity of consume is equal to ? A. Total spending / total consumption B. Total consumption / total incomeC. Change in consumption / change in income D. Change in consumption / change in savings

The terms of trade measure ? A. The income of one country compared to another B. The GDP of one country compared to another C. The quantity of exports of one country compared to anotherD. Export prices compared to import…

If a country can produce 10 of product A or 4 of product B the opportunity cost of 1B is ? A. 0.4AB. 2.5A C. 10A D. 1B