Question 1

The "East Asian Miracle" is

Accepted Answer

A)   the ability of so many people to live in such small areas.
B)   the fact that so many Influenza varieties originate from this region.
C)   the fact that poor dualistic economies managed to escape the vicious circle of poverty.
D)   the ability to maintain large positive trade balances with the U.S.
E)   the advent of completely free labor mobility between east Asian countries.F) A) and E)
G) A) and B)

Question 2

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

Accepted Answer

Import substitution promotes that econom...

Question 3

A reason why it is difficult for developing countries to maintain a cartel is that

Accepted Answer

A)   the elasticity of demand for a cartel's output decreases over time.
B)   producers in the cartel have an economic incentive to cheat.
C)   economic profits discourage other producers from entering the industry.
D)   producers in the cartel have the motivation to lower prices but not to raise prices.
E)   tariffs allow producers in the cartel to produce items that make no profit.F) B) and D)
G) All of the above

Question 4

The experience of sub-Saharan Africa, as compared to that of "Other Asia" (not including the HPAEs)  supports the argument that

Accepted Answer

A)   high rates of protection tend to harm economic growth.
B)   the poorer is the country the easier it is for it to "catch up" economically.
C)   low rates of protection tend to promote economic growth.
D)   free trade always best stimulates a developing country's economy.
E)   neither trade liberalization nor import substitution is a foolproof strategy for economic development.F) All of the above
G) C) and D)

Question 5

The disappointment with import-substitution policies is in part because

Accepted Answer

A)   of the rapid and continuous growth record of South American countries.
B)   many countries pursuing this strategy experienced stagnation in their growth.
C)   this policy is inconsistent with sophisticated economic growth models.
D)   this policy tended to create world-class industrial competitors.
E)   of the financial investment lost by the U.S.F) C) and D)
G) A) and B)

Question 6

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

Accepted Answer

A)   international commodity agreement
B)   export promotion
C)   multilateral contract
D)   import substitution
E)   export subsidiesF) B) and E)
G) A) and E)

Question 7

The relatively rapid economic growth experienced by Chile in the late 1980s

Accepted Answer

A)   supported the conventional Latin American reliance on import substitution.
B)   relied on the Harris-Todaro model to explain this growth.
C)   rejected the conventional Latin American reliance on import substitution.
D)   demonstrated the importance of market failure as a reason for import substitution.
E)   relied on high tariffs and import substitution.F) B) and E)
G) A) and B)

Question 8

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing, what trade policy might gain ABC of economic welfare?

Accepted Answer

Import-substitution ...

Question 9

The infant industry argument is that

Accepted Answer

A)   comparative advantage is irrelevant to economic growth.
B)   developing countries have a comparative advantage in agricultural goods.
C)   developing countries have a comparative advantage in manufacturing.
D)   developing countries have a potential comparative advantage in manufacturing.
E)   developing countries have no chance to compete with industrialized countries.F) A) and C)
G) B) and D)

Question 10

-Refer to above figure. If manufacturing labor were to increase to OmL2, how much value would the economy as a whole gain?

Accepted Answer

The answer of 
-Refer to above figure. If manufacturing labor...

Question 11

-Refer to above figure. If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in agriculture?

Accepted Answer

The answer of 
-Refer to above figure. If OmL1 workers...

Question 12

The development of countries like South Korea has been supported by all of the following EXCEPT

Accepted Answer

A)   high domestic interest rates.
B)   high domestic saving rates.
C)   large endowments of human capital.
D)   high levels of labor productivity.
E)   reduced government regulation.F) A) and D)
G) B) and E)

Question 13

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Accepted Answer

A)   discouraging exports.
B)   encouraging exports.
C)   encouraging an efficient use of a country's resources.
D)   generating large tariff revenues for the government.
E)   creating competitive manufacturing sectors.F) C) and E)
G) A) and B)

Question 14

The HPAE (High Performance Asian Economies)  countries

Accepted Answer

A)   have all consistently supported free trade policies.
B)   have all consistently maintained import-substitution policies.
C)   have all consistently maintained non-biased efficient free capital markets.
D)   have all maintained openness to international trade.
E)   have all outperformed the U.S.F) C) and E)
G) None of the above

Question 15

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

Accepted Answer

A)   did not accomplish this with import-substituting industrialization.
B)   did accomplish this with import-substituting industrialization.
C)   tended to provide heavy protection to domestic industrial sectors.
D)   favored industrial to agricultural or service sectors.
E)   did so to the detriment of their nearest neighbors.F) C) and E)
G) A) and C)

Question 16

The HPAE "economic miracle" illustrates a clear case in which

Accepted Answer

A)   exports and growth were positively related.
B)   exports were promoted by successful economic growth.
C)   economic growth was determined by successful export promotion.
D)   trade policy dominated other considerations in promoting economic growth.
E)   import substitution enhanced economic development.F) D) and E)
G) A) and E)

Question 17

The United States, as it began its long and successful growth in the early 19th century, consciously promoted domestic production through such activities as tariffs, Clay's American System, and many direct subsidies to railroads, canal companies, farmers (free land) etc. Today we view this blatant example of large scale and extensive import-substitution industrialization as having been very successful. Comment on this.

Accepted Answer

This is an interesting point and emphasi...

Question 18

To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the

Accepted Answer

A)   international commodity agreements program.
B)   multilateral contract program.
C)   generalized system of preferences program.
D)   export led growth program.
E)   import substitution policy.F) A) and B)
G) None of the above

Question 19

Import substitution policies make use of

Accepted Answer

A)   tariffs that discourage goods from entering a country.
B)   quotas applied to goods that are shipped abroad.
C)   production subsidies granted to industries with comparative advantage.
D)   tax breaks granted to industries with comparative advantage.
E)   production facilities provided by industrialized countries.F) A) and B)
G) A) and C)

Question 20

Brazil's export record in 1999 illustrated the principle that

Accepted Answer

A)   a large country will tend to have few exports.
B)   a small country will tend to have a high export ratio.
C)   protectionist policies tend to discourage exports.
D)   export-promoting policies do not tend to work.
E)   import substitution policies helped the Brazilian economy.F) D) and E)
G) C) and D)

Exam 11: Trade Policy in Developing Countries

Import substitution policies make use of

Correct Answer
verified

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

Correct Answer
verified
Import substitution promotes that econom...
View Answer

To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the

Correct Answer
verified

The "East Asian Miracle" is

Correct Answer
verified

The HPAE (High Performance Asian Economies) countries

Correct Answer
verified

The HPAE "economic miracle" illustrates a clear case in which

Correct Answer
verified

The development of countries like South Korea has been supported by all of the following EXCEPT

Correct Answer
verified

The disappointment with import-substitution policies is in part because

Correct Answer
verified

Brazil's export record in 1999 illustrated the principle that

Correct Answer
verified

The infant industry argument is that

Correct Answer
verified

The experience of sub-Saharan Africa, as compared to that of "Other Asia" (not including the HPAEs) supports the argument that

Correct Answer
verified

Correct Answer
verified
This is an interesting point and emphasi...
View Answer

The relatively rapid economic growth experienced by Chile in the late 1980s

Correct Answer
verified

-Refer to above figure. If manufacturing labor were to increase to OmL2, how much value would the economy as a whole gain?

Correct Answer
verified

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing, what trade policy might gain ABC of economic welfare?

Correct Answer
verified
Import-substitution ...
View Answer

A reason why it is difficult for developing countries to maintain a cartel is that

Correct Answer
verified

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Correct Answer
verified

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

Correct Answer
verified

-Refer to above figure. If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in agriculture?

Correct Answer
verified

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

Correct Answer
verified

Exam 11: Trade Policy in Developing Countries

Import substitution policies make use of

Correct AnswerverifiedShow Answer

It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument.

Correct AnswerverifiedImport substitution promotes that econom...View AnswerShow Answer

To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the

Correct AnswerverifiedShow Answer

The "East Asian Miracle" is

Correct AnswerverifiedShow Answer

The HPAE (High Performance Asian Economies) countries

Correct AnswerverifiedShow Answer

The HPAE "economic miracle" illustrates a clear case in which

Correct AnswerverifiedShow Answer

The development of countries like South Korea has been supported by all of the following EXCEPT

Correct AnswerverifiedShow Answer

The disappointment with import-substitution policies is in part because

Correct AnswerverifiedShow Answer

Brazil's export record in 1999 illustrated the principle that

Correct AnswerverifiedShow Answer

The infant industry argument is that

Correct AnswerverifiedShow Answer

The experience of sub-Saharan Africa, as compared to that of "Other Asia" (not including the HPAEs) supports the argument that

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThis is an interesting point and emphasi...View AnswerShow Answer

The relatively rapid economic growth experienced by Chile in the late 1980s

Correct AnswerverifiedShow Answer

-Refer to above figure. If manufacturing labor were to increase to OmL2, how much value would the economy as a whole gain?

Correct AnswerverifiedShow Answer

-Refer to above figure. If the economy were in the initial position (where OmL1 workers were in manufacturing, what trade policy might gain ABC of economic welfare?

Correct AnswerverifiedImport-substitution ...View AnswerShow Answer

A reason why it is difficult for developing countries to maintain a cartel is that

Correct AnswerverifiedShow Answer

General equilibrium considerations lead to the realization that import-substituting policies have the effect of

Correct AnswerverifiedShow Answer

Historically those few developing countries which have succeeded in significantly raising their per-capita income levels

Correct AnswerverifiedShow Answer

-Refer to above figure. If OmL1 workers are employed in manufacturing then what is the marginal productivity of labor in agriculture?

Correct AnswerverifiedShow Answer

Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Import substitution promotes that econom...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
This is an interesting point and emphasi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Import-substitution ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified