CHAPTER 6 : INTERNATIONAL ECONOMICS

Which of the following is NOT the advantages of international trade?

• Increase world output

• Depletion of country's reserves

• Sharing the knowledge and technology

• relationship between trading partners

Which of the following are protectionism policies purposes?

I. infant industry argument

II. transportation cost argument

III. national security argument

IV. domestic employment argument

• I, II III and IV

• I, II and III

• I, III and IV

• I and IV

Which of the following is NOT a way to overcome deficits in the balance of payments?

• Price control

• Devaluation

• Export promotion

• Government reserves

The purpose of the protectionism policy in the international trade are listed below EXCEPT

• a country should not depend on another country produce security goods

• the new industry is not ready to compete with the foreign firm

• creating goods relations between merchant countries

• an increase in the value of currency will cause

An increase in the value of currency will cause

• promoting cost push inflation

• promoting demand pull inflation

• increase the value of import

• increase the value of export

The developing countries need to protect their infant industries from competition through imposing

• indirect taxes

• income taxes

• import taxes

• export taxes

Those who benefit from the protectionism policy through tariff are ______________

• users in a foreign country

• domestic users

• producers in foreign countries

• domestic producers

The current account in the balance of payments consists of __________

• goods and services account and current transfer

• current transfer, direct investment and portfolio investment

• goods and service account, income account and current transfer

• income, current transfer, other investment and errors and omissions

In the foreign exchange rate system, the value of the currency of a country is determined by _______________

• demand and supply of export and import

• total central bank reserves

• International Money Fund

• demand and supply of currency