question 36 Recent technological changes have had profound e

question 36

Recent technological changes have had profound effects on the movement of capital across international boundaries. One of the main effects has been

Select one:

a. an increase in the transaction costs of moving capital.

b. a decrease in the transaction costs of moving capital.

c. a long-run decline in real interest rates.

d. a long-run increase in real interest rates.

e. None of the above.

Question 37

Harmonization of standards refers to

Select one:

a. the elimination of tariffs and quotas by trading partners.

b. common product safety, environment, labor, and fair competition standards agreed upon by trading partners.

c. the acceptance or keeping of a trading partner\'s standards as valid and sufficient by another trading partner.

d. separate standards held by different trading partners which other partners refuse to recognize.

e. All of the choices.

Question 38

Which of the following is FALSE?

Select one:

a. The openness index helps to give a sense of how important trade is to an economy.

b. Smaller countries tend to have lower openness measures than large countries.

c. A country that exported $20 billion, imported $30 billion, and had GDP of $100 billion would have an index of openness of 0.5 or 50 percent.

d. It is possible for an openness index to be greater than 100 percent.

Question 39

Comparative advantage has mixed results when it comes to predicting a country\'s trade patterns. Which of the following is FALSE?

Select one:

a. Comparative advantage has proven completely incapable of predicting trade.

b. A large share of international trade is not based on comparative advantage.

c. There are many potential products an economy might export that use the same comparative advantage.

d. Comparative advantage is a dynamic concept, which means that the spread of technology, improvement in skills, and learning-by-doing may alter a country\'s comparative advantage over time.

Solution

Ans

36 b. Computers information technology etc have reduced transaction costs

37 b is right. Like common environmental standards

38 b is right. There is no such tendency

39 a. This is not true. It is significant theory. Even intra industry trade is explained with some modifications like acquired comparative advantage