International Trade 3

2. An American computer imports all parts used to produce computers from a Vietnamese company. It uses all those parts to produce computers and then exports back finished computers to that Vietnamese company. This selling activity of the American company is

• a. Export

• b. Re - export

• c. International Processing

• d. Switch trade

3. The Ricardian model explains comparative advantage as the result of differences in countries

• a. economies of large-scale production

• b. relative abundance of various resources

• c. labor productivities

• d. research and development expenditures

4. Which of the following is NOT the current trend of international trade?

• a. The role of developing countries, especially China in international trade, has been increased

• b. E - commerce is growing

  
  

• c. Agricultural products are the most traded commodities

• d. Traded products have become diversified and innovated

5. International trade is more complex than domestic trade because

• a. International trade is the exchange of tangible and intangible goods

• b. International trade focus on real transaction of goods and services in international economy

• c. The trade transaction is under the control of the authorities

• d. The shipment with various customs and insurance procedures

6. According to H - O theory, if Vietnam has more land per worker, and the UK has more capital per worker, then

• a. Vietnam would export product which is land-intensive

• b The US would import products which is capital-intensive

• c. Both countries would export some of each product

• d. Trade would not continue since Vietnam is a smaller country"

8. The effective rate of protection measures:

• a. the "true" ad valorem value of a tariff

• b. The quota equivalent value of a tariff

• c. the efficiency with which the tariff is collected at the customhouse

• d. the protection given by the tariff to domestic valued added

9. The gravity model postulates that the value of trade between two countries is ___ other things equal, to the economic size of the two countries, and ___ with the distance between them

• a. diminishing, diminishing

• b. dependent, proportional

• c. proportional, diminishing

• d. constant, proportional

10. In a large exporting country, an export subsidy will

• a. help consumer and raise the overall economic welfare of the exporting country

• b. hurt consumers but raise the overall economic welfare of the exporting country

• c. hurt consumers but lower the overall economic  welfare of the exporting country

• d. help consumers but lower economic welfare of the exporting country

11. If the country imposes an import tariff, its welfare can improve if

• a. the country is a "small country" rather a "large country"

• b. its items of trade improve enough

• c. the tariff enhances the welfare of its trading partners

• d. its government's tax revenue increases"

12. it is argued that high-tech industries typically generate new technologies but cannot fully appropriate the momercial benefits associated with their real income, the government should

• a. tax the high-tech firms

• b. subsidize the high-tech firms

• c. protect the high-tech firms

• d. B & C