trade policies for the developing nations Mcqs
1. Hong Kong and South Korea are examples of developing nations that have recently pursued ________ industrialization policies?
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A. commercial dumping

B. import substitution

C. multilateral contract

D. export promotion
2. Concerning the hypothesis that there has occurred a long run deterioration in the developing countries terms of trade empirical studies provide ?
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A. overwhelming support for the deterioration hypothesis

B. mixed evidence that does not substantiate the deterioration hypothesis

C. overwhelming opposition to the deterioration hypothesis

D. None of the above

3. Tariff levels in advanced countries tend to be __________ tariff levels in developing countries?
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A. lower than

B. there is no general pattern

C. higher than

D. equal to

4. In the Px = export price index, Pm = import price index, Qx = export quantity index,and Qm = import quantity index. Developing countries tend to maintain that their commodity term of trade have declined over the long run suggesting that _________ has declined?
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A. Pm/Px

B. (Pm/Px)Qm

C. Px/Pm

D. (Px/Pm)Qx

5. Developing countries that emphasize the production of raw materials or agricultural goods may realize a long-run deterioration in the international terms of trade because of ?
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A. relatively low import tariffs maintained by advanced countries

B. highly elastic demand for these products in advanced countries

C. sluggish demand for these products in advanced countries

D. declines in the supplies of these products on world markets

6. Which of the following organizations primarily provides long-term loans to developing countries to help them develop their infrastructure such as schools hospitals and roads ?
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A. World Bank

B. Council on Foreign Relations

C. International Monetary Fund

D. Organization of petroleum Exporting Countries

7. Among the institutions and policies that have been created to support developing countries are?
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A. The Generalized System of Preferences

B. All of the above

C. the international Monetary Fund

D. the world Bank

8. Instead, assume that global economic expansion causes the quantity of tin demanded to increase by 4 million pounds at each price To maintain price of tin at the target price you would ?
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A. sell 8 million pounds of tin

B. sell 4 million pounds of tin

C. buy 8 million pounds of tin

D. buy 4 million pounds of tin

9. A widely used indicator to differentiate developed countries from developing countries is ?
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A. unemployment per capita

B. real income per capital

C. calories per capita

D. international trade per capita

10. Poor developing countries typically impose __________ tariffs than rich advanced nations on imports?
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A. lower

B. None of the above

C. about the same height

D. higher
11. To stabilize the prices of primary products international commodity agreements have utilized all of the following except ?
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A. buffer stocks

B. production and export controls

C. multilateral contracts

D. tariff-rate quotas applied to imported goods
12. Because supply and demand conditions for primary products are very price inelastic their prices ?
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A. tend to be very unstable from year to year

B. have been steadily rising in recent decades

C. have been more stable than the prices of manufactured goods

D. fluctuate about as much as the prices of manufactured goods

13. The Peoples Republic of China ?
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A. has always accounted for a significant share of international trade, given its very large population

B. has retained to the present time its strategy of import substitution as a source of economic growth

C. is the first of the East Asian countries to be recognized for a successful outward-oriented development strategy

D. has significantly increased its openness to international trade and foreign investment in recent decades
14. Developing countries that concentrate production in agricultural products or raw materials may face a long-run decline in their international terms of trade because of ?
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A. inelastic demand for these products in advanced countries

B. large increases in the supplies of these products on world markets because of export expansion policies

C. sluggish demand for these products in advanced countries

D. All of the above
15. To be considered a a good candidate for an export cartel, a commodity should ?
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A. be a primary product

B. have high price elasticity of supply

C. have a low price elasticity of demand

D. be a manufactured goods

16. Concerning tariff policy, the United States does not charge?
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A. lower tariff rates on goods from nations with normal trade relation status

B. identical tariff rates in products from all countries of the world

C. lower tariff rates on goods from nations with most favored nation status

D. low or zero tariffs on goods from certain developing countries

17. The ability of the Organization of Petroleum Exporting Countries (OPEC) to maximize profits is hampered by ?
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A. similar cost schedules for member countries

B. highly inelastic world demand curve for oil

C. economic recession for oil importing nations

D. a lack of substitutes for oil

18. Membership in the World Trade Organization for china ?
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A. has been opposed by a number of labor and human rights organizations in other countries

B. has been a matter of low priority for the Chinese government

C. was achieved in the early 1950s

D. has had negligible effect on trade between china and the United States

19. To help developing nations strengthen their international competitiveness many industrial nations have granted non-reciprocal tariff reductions to developing nations under the ?
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A. multilateral contract program

B. export-led growth program

C. international commodity agreements program

D. generalized system of preferences program
20. The Generalized System of Preferences (GSP) program allows ?
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A. any developing country to ignore the most-favored nation clause

B. any advanced country to ignore the most favored-nation clause

C. developing country export to advanced countries to receive preferential tariff treatment

D. developing country imports from advanced countries to receive preferential tariff treatment

21. Assume that global recession causes the quantity of tin demanded to decrease by 4 million pounds at each price To maintain the price of tin at the target price you would ?
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A. sell 8 million pounds of tin

B. sell 4 million pounds of tin

C. buy 8 million pounds of tin

D. buy 4 million pounds of tin
22. To be considered a good candidate for export cartel, a commodity should ?
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A. have a high price elasticity of demand

B. be a manufactured good

C. have a low price elasticity of supply

D. be a primary product

23. Export-led growth strategies tend to emphasize ?
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A. resource allocation based on the principle of comparative advantage

B. resource allocation based on the principle of absolute advantage

C. trade protection for import-competing firms

D. trade protection for exporting-competing firms

24. For the oil-importing countries, the increase in oil prices in 1970s and early 2000s contributed to all of the following except ?
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A. price inflation

B. improving terms of trade

C. balance of trade deficits

D. constrained economic growth

25. An export quota agreement to stabilize the price of bauxite tends to be more successful when the member producer countries as a percentage of the worlds producer countries is __________ and the _________ it is for the member producer countries to store/stock pile bauxite?
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A. relatively large; easier

B. relatively small; more difficult

C. relatively small; easier

D. relatively large; more difficult

26. Assume That the firms operate as purely competitive sellers (a purely competitive industry) In the long run, equilibrium price equals _________ quantity equals _________ and profits total _________?
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A. $100, 2 million barrels per day $60 million

B. $80, 4 million barrels per day $70 million

C. $40, 8 million barrels per day, $0 million

D. $60, 6 million barrels per day, $20 million

27. Suppose that the world price of tin is above the target (ceiling) price that is defined by an international commodity agreement. To move the world price toward the target price, a buffer stock agreement would require its buffer stock manager to ____ tin and an export quota agreement would require that member countries _________ their export of tin?
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A. purchase; decrease

B. purchase; increase

C. sell; decrease

D. sell; increase
28. The pattern of economic growth describes the phenomenon of countries moving up in technological development by following the patterns of countries ahead of them in the development process ?
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A. export orientation

B. commodity expansion

C. flying geese

D. import substitution

29. Suppose that the demand curve for tin is highly inelastic. If the supply curve of tin decrease and increase cyclically along the demand curve for tin then in this market the size of the price fluctuation will be __________ the size of the quantity fluctuations?
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A. the same as

B. relatively less than

C. any of the above

D. relatively greater then
30. Economic growth occurs because ?
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A. labor forces increase

B. capital stocks increase

C. All of the above

D. new inventions increase productivity

31. All of the following are trade problems of developing countries except?
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A. improving terms of trade

B. highly elastic demand curves for their products

C. unstable export markets

D. limited access to the markets of industrial countries

32. Suppose that the firms collude and become a cartel The best level of output for the cartel as a whole is ___________ the price equals __________ and profits total __________?
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A. 2 million barrels per day, $100, $60 million

B. 6 million barrels per day, $60, $60 million

C. 4 million barrels per day, $80, $160 million

D. 8 million barrels per day, $40, $20 million

33. Most of developing-country exports consist of ?
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A. labor-intensive agricultural products

B. primary products such as tin and bauxite

C. labor-intensive manufacturing products

D. intermediate products

34. Which of the following strategies have developing countries not used to deal with the problem of unstable export markets ?
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A. production and export controls

B. multilateral contracts

C. tariff-rates quotas

D. buffer stock arrangements

35. The OPEC oil cartel ?
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A. has shown that is easy to achieve cooperation among cartel members

B. was successful in raising oil prices in the 1970s but was disbanded in the 1980s

C. has shown greater success in realizing profits during periods of global recession

D. has had a level of success in raising oil prices that other developing countries are unlikely to achieve with other primary commodities
36. _________ policies attempt to foster industrialization by establishing high barriers to imports of foreign goods to promote local production ?
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A. absolute advantage

B. export-led growth

C. comparative advantage

D. import substitution
37. Import substitution is an example of ?
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A. the principle of absolute advantage

B. an outward-looking growth strategy

C. the principle of comparative advantage

D. an inward-looking growth strategy
38. Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as a guide to resource allocation ?
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A. export promotion

B. international commodity agreements

C. import promotion

D. multilateral contracts

39. The arrangement where goods imported from trading partners in the developing world are subject to lower tariff rates than goods from other countries is referred to as ?
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A. most favored nation status

B. Generalized System of Preferences

C. normal trade relation status

D. offshore assembly provisions

40. Suppose that the supply curve of tin is highly inelastic. If the demand curve of tin decrease and increase cyclically along the supply curve of tin, then in this market the size of the quantity fluctuation will bathe size of the price fluctuations ?
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A. the same as

B. relatively less than

C. Any of the above

D. relatively greater than