Reference no: EM13834826
1. Suppose that with 1 unit of labor, Canada can produce 40 TVs or 20 computers. With 1 unit of labor, Taiwan can produce 30 TVs or 10 computers. Which of the following is correct?
a. Taiwan has a comparative advantage in the production of computers.
b. Canada has an absolute advantage in the production of neither good.
c. Canada has a comparative advantage in the production of computers.
d. Taiwan has an absolute advantage in the production of computers.
e. Taiwan has an absolute advantage in the production of TVs.
2. Assume that a country imposes a tariff in order to gain a price advantage on an item. What is the typical response from the exporting country?
a. It accepts the situation, and does nothing about it.
b. It seeks greater efficiency in order to offset the tariff.
c. It refuses to sell to the country that imposes the tariff.
d. It retaliates by imposing tariffs or quotas on items from the other country.
3. The danger of using the national defense argument to protect domestic industries necessary to wage war is that
a. it has no validity on non-economic grounds.
b. it is unrelated to the United States' ability to wage war.
c. other nations will retaliate with tariffs against U.S. producers of war material.
d. industries with only the most peripheral relationship to defense are likely to invoke this argument on their behalf.
4. In the long run, foreign labor remains cheap when and if
a. it becomes highly efficient and competes successfully internationally.
b. countries erect barriers to trade between poor countries.
c. productivity increases more rapidly in poor countries than in rich countries.
d. it remains inefficient compared to other countries' labor.
6. If a currency increases in value as a result of government decree rather than market forces, the process is known as
a. reflation.
b. revaluation.
c. appreciation.
d. value-added.
|
Banks use the channel system for targeting interest rates
: In 2008, Poland was forced to devalue its currency against the Euro. Which of the following groups was most damaged? Which of the following central banks use(s) the channel system for targeting interest rates?
|
|
The fed is guilty of excessive money supply growth
: For this final question, assume what we have been assuming for the last two questions EXCEPT NOW assume that the economy is NOT at full employment, but that actual GDP is 2% below potential GDP. Under these conditions, if the money supply were to gro..
|
|
Quality-amount of education typical person receives caries
: The quality and amount of education the typical person receives caries substantially across countries. Assume that education (E) affects only the level of the efficiency of labour, and that countries are otherwise identical (in terms of saving rate, ..
|
|
Increase high-powered money
: If the required reserve ratio were .25, then a $8 million increase in H ("high-powered money") from the Fed could lead to an increase in the money supply by as much as $____ million.
|
|
What is the typical response from the exporting country
: Suppose that with 1 unit of labor, Canada can produce 40 TVs or 20 computers. With 1 unit of labor, Taiwan can produce 30 TVs or 10 computers. Assume that a country imposes a tariff in order to gain a price advantage on an item. What is the typical r..
|
|
Measure of common stock volatility
: Easy Lawn Care Incorporated has a beta (a measure of common stock volatility) of 1.32, what is its estimated cost of equity capital based on the CAPM when the risk-free interest rate is 2%?
|
|
Compute minimum cost production lot size-maximum inventory
: XYZ Co. manufactures bicycles. Demand for this year’s model is expected to occur at a constant annual rate of 7200 items. One bicycle costs $245. The holding cost is based on a 11% annual rate, and production setup costs are $340. Use the production ..
|
|
Assuming income tax rate-straight-line depreciation charge
: The Capitalpoor Company is considering purchasing business machine for $100,000. An alternative is to rent it for $35,000 at the beginning of each year. The rental would include all repairs and services. Assuming an income tax rate of 25%, a straight..
|
|
What is the expected return for this investment
: A firm is considering a capital investment. The risk premium is 0.04, and it is considered to be constant through time. Riskless investments may now be purchased to yield 0.06 (6%). If the project’s beta (?) is 1.5, what is the expected return for th..
|