An optimal tariff is one which reduces imports to the level at which ____ equals ____?

A. Imports, exports
B. The balance of trade, zero
C. The demand for currency the supply of currency
D. Social marginal cost, social marginal benefit

Economic transition involves high inflation because _____ and ______?

A. High monetary growth high wages
B. High budget deficits devaluation
C. High monetary growth devaluation
D. Prices surge from an artificially low level to their equilibrium level the inflation tax is required a source of government revenue

All of the following represent obstacles to LDC development except ?

A. Resource scarcity
B. Low levels of investment
C. Low population
D. Poor infrastructure

The main cause of different relative costs between countries are ?

A. Relative factor competition
B. Relative factor mobility
C. Relative factor substitution
D. Relative factor endowments

The imposition of a tariff causes consumption to _____ and imports to _________?

A. Rise, rise
B. Fall, rise
C. Fall, fall
D. Rise, fall

Tariffs ?

A. Decrease the domestic price of a product
B. Increase government earnings from tax
C. Increase the quantity of imports
D. Decrease domestic production

In a floating exchange rate system ?

A. The government intervenes to influence the exchange rate
B. The exchange rate should adjust to equate the supply and demand of the currency
C. The balance of payments should always be in surplus
D. The balance of payments will always equal the government budget

If there is a balance of payments deficit then in a floating exchange rate system ?

A. The external value of the currency would tend to fall
B. The external value of the currency would tend to rise
C. The injections from trade are greater then the withdrawals
D. Aggregate demand is increasing

International specialization takes place because of______________?

A. Differences in technology
B. Differences in factor endowments
C. Scale economies
D. All of the above

When countries from large trading blocs like the EU, the size of the bloc has the effect of improving them ?

A. Balance of trade
B. Comparative advantage
C. Balance of payments
D. Terms of trade