C7 : SET 3 - INTERNATIONAL ECONOMICS

Given the same amount of resources, if a country can produce more of particular commodities compared to another country, that country is said to have ____________________.

• productive advantage.

• an absolute advantage.

• a comparative advantage.

• ratio of export price index to import price index.

Which of the following would benefit the most from protectionist policy?

• big firms.

• domestic industry.

• importers.

• unemployed.

Which of the following statement is FALSE?

• Protectionism is practiced only in domestic trade.

• Size of market is relatively bigger for international trade.

• Usage of different units of currency in international trade.

• Resources are more mobile domestically than they are internationally.

Which of the following is not included in the current account balance?

• Net income.

• Current transfer.

• Financial account.

• Balance of goods and services

If the Malaysia ringgit (RM) is said to be depreciated relative to the U.S dollar, then the dollar ___________________.

• will be less expensive to Malaysians.

• will appreciate relative to Malaysian ringgit.

• will depreciate relative to Malaysian ringgit.

• either will appreciate or depreciate relative to Malaysian ringgit.

The current transfer includes the following items EXCEPT_______________.

• gift.

• military aid.

• financial aid.

• investment

Exchange rate fluctuations will cause ________________.

• an increase in the domestic price which leads to inflation.

• a decrease in the international price which lead to employment.

• imported goods and services to face heavy profit.

• none of the above.

The differences between domestic trades an international trade is as follows EXCEPT ________________.

• there is greater specialization in international trade than in domestic trade.

• trade documentation is simpler in domestic trade than in international trade.

• there are less trade barriers in international trade than domestic trade.

• different currencies are used in international trade.

Current account in the Malaysian Balance of Payment (BOP) contains ____________________.

• receipts and payments on goods and services.

• receipts on goods and services.

• payments on goods and services.

• receipts and payments on goods.

The exchange rate between ringgit Malaysia (RM) with Japanese Yen (¥) has changed from RM1 = 300 Yen to RM1 =350 Yen. What is the impact of exchange rate change?

• The demand for Malaysia products in Japan has increased.

• The demand for Japanese goods in Malaysia has fallen.

• The prices of Malaysian goods become more expensive in the Japanese market.

• The prices of Japanese goods become more expensive in the market for Malaysian.