ECN 367 Final

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1

Which of the following is true?

a. Immigrant and native workers are more likely to compete against offshoring than against each other

b. Immigrant and native workers are less likely to compete against offshoring than against each other

c. Immigrant and native workers neither compete against offshoring nor against each other

d. None of the above.

A

2

Which of the following is true?

a. Both offshoring and immigration generate similar productivity enhancing effects.

b. The productivity effects of both offshoring and immigration could offset or even reverse the direct displacement effect on native workers

c. None of the above.

d. Both a and b.

D

3

An increase in offshoring

a. pushes the average task performed by natives toward higher cognitive and non-routine content.

b. pushes immigrants towards more manual and routine tasks.

c. pushes natives towards more repetitive tasks.

d. None of the above.

e. Both a and b.

E

4

People move from one part of the world to another

a. to improve their lives.

b. because they get bored living in the same country.

c. None of the above.

d. Both a and b.

A

5

The following factor(s) is/are responsible for immigration from developing to developed countries:

a. rapid increase in the number of young adults in developing countries.

b. an aging population in developed countries.

c. hardworking population in developing countries.

d. preference for rural living in developed countries.

e. Both a and b.

E

6

The main problem with parallel imports is that

a. counterfeit drugs are possible and there are quality issues.

b. there could be labeling errors.

c. there is the possibility of contamination.

d. there could be inadequate instructions provided.

e. All of the above.

E

7

Medical tourism to developing countries can lead to

a. crowding out of poor patients in those countries.

b. can lead to fewer jobs for doctors and nurses in developed countries.

c. increase in medical costs in poor countries.

d. All of the above.

D

8

Offshoring leads to

a. specialization by domestic firms in core competencies.

b. specialization by domestic firms in low-value activities.

c. specialization by domestic firms in peripheral activities.

d. None of the above.

A

9

The textile industry has virtually moved from the Carolinas to the developing world

a. due to competition.

b. for lower wages.

c. because of (a) leading to (b).

d. None of the above.

C

10

Which of the following statements is true?

a. Personal services are offshorable.

b. Personal services are not offshorable.

c. Impersonal services are offshorable.

d. Impersonal services are not offshorable

e. Both b and c.

E

11

The least volatile capital movement is the following:

a. Portfolio equity investment.

b. Portfolio debt investment.

c. Foreign Direct Investment.

d. None of the above

C

12

Foreign Direct Investment

a. can boost exports.

b. can enhance export sophistication.

c. enhances import sophistication.

d. None of the above.

e. Both a and b.

E

13

Which of the following statements is true?

a. FDI transfers advanced technology to the host country.

b. It fosters human capital development through employee training.

c. It strengthens domestic corporate institutions.

d. It exposes domestic firms to best business practices.

e. All of the above.

E

14

The Uruguay Round of trade negotiations concluded in 1994 with agreements on

a. liberalization of trade in agriculture and apparel.

b. extension of trade rules to services, investment and intellectual property..

c. establishment of the World Trade Organization (WTO).

d. all of the above.

D

15

According to the Reciprocal Trade Agreements Act (RTAA)

a. import tariff reductions by the US had to be reciprocated by its trading partners.

b. the President was delegated the authority to strike trade deals with other countries

c. tariffs had to be reduced unilaterally

d. Both a and b are true

D

16

During the last three decades in developing countries,

a. there were reforms in trade (tariffs, NTBs and foreign exchange restrictions)

b. there were industrial policy reforms

c. there was privatization

d. there were macroeconomic reforms

e. there were all of the above.

E

17

Dollar and Kraay found that

a. globalizers (top third of developing countries on the basis of trade-GDP ratio) experienced a 5% annual increase in per capita GDP.

b. others experienced only a 1.4% increase since the 1980s.

c. globalizers experienced a 2% decline in the per capita GDP.

d. other experienced a 4% increase in per capita GDP.

e. Both a and b were true.

E

18

According to the World Bank, “Trade reforms are most likely to stimulate growth when they are part of a comprehensive strategy.” Important elements of this comprehensive strategy are

a. sound macroeconomic management.

b. building of trade related infrastructure and institutions.

c. economywide investment in physical and human capital, and maintenance of a sound rule of law.

d. greater access to developed and developing country markets.

e. All of the above.

E

19

The main distinguishing feature of the WTO compared to the GATT is

a. the dispute settlement process.

b. the imposition of environmental standards.

c. the imposition of labor standards.

d. the presence of a WTO police.

A

20

The Uruguay Round of trade negotiations concluded in 1994 with agreements on

a. liberalization of trade in agriculture and apparel.

b. extension of trade rules to services, investment and intellectual property..

c. establishment of the World Trade Organization (WTO).

d. all of the above.

D

21

The Doha Development Round (that was supposed to be concluded in 2005) is stalled because

a. developing countries are unwilling to do any further negotiations on competition and investment.

b. developed countries are unwilling to reduce their agricultural support.

c. TRIPs remains contentious.

d. All of the above.

D

22

The following obstruct(s) the poverty reducing and inequality reducing effects of trade

a. Lack of intersectoral mobility of factors.

b. Complementarity of capital goods imports with skilled labor and their substitutability with unskilled labor.

c. Quality upgradation associated with exports.

d. All of the above.

D

23

Regional Trade Agreements

a. always lead us to free trade.

b. can have both trade diverting and trade creating effects.

c. may not lead to free trade.

d. Both b and c.

D

24

Which of the following statements is/are true?

a. India has consistently grown faster than China during the last two decades.

b. China overall has had a better performance in growth and poverty reduction than India over the last couple of decades.

c. Inequality has risen much more in India than in China over the last couple of decades.

d. All of the above.

e. None of the above.

B

25

After the verdict of the GATT panel on the Tuna-Dolphin case went against the US,

a. the US changed policy and allowed the imports of all tuna from the rest of the world.

b. US did not change policy but reached an agreement with some countries that they would use dolphin-safe methods and then the US would import tuna from them.

c. the US provided monetary compensation to countries that used dolphin-unsafe methods and from whom the US refused to import.

d. None of the above.

B

26

Which of the following is true?

a. The WTO has always forced lower environmental standards on the US’s EPA.

b. The WTO has wanted the EPA to abide by the National Treatment rule in the case of imported gasoline, so that the US could either raise standards on domestic gasoline or lower standards on imported gasoline (or do a combination of the two).

c. The WTO has sometimes forced lower gasoline standards on the EPA.

d. None of the above.

B

27

EU’s ban on imports of hormone-treated beef

a. is consistent with WTO rules.

b. violates the agreement on Sanitary and Phytosanitary (SPS) measures.

c. was a precautionary measure taken by the EU.

d. Both b and c.

e. None of the above.

D

28

Deng Xiaoping initiated reforms in China in 1978

a. by decollectivizing agriculture.

b. by lifting foreign exchange controls.

c. by allowing trade by private parties.

d. by permitting foreign investment.

e. All of the above.

E

29

India

a. pursued a policy of free trade and free markets right since its independence in 1947.

b. pursued a policy of self-sufficiency and planning since its independence, up until the late 1980s.

c. experienced sluggish growth and persistent poverty after independence until the 1980s.

d. Both b and c.

e. None of the above.

D

30

In a world with two factors of production, namely high-skilled and low-skilled labor and where both types of labor freely move between sectors within a country,

a. trade reduces poverty in a low-skilled labor abundant country.

b. trade reduces poverty in a high-skilled labor abundant country.

c. trade increases poverty in a low-skilled labor abundant country.

d. None of the above.

A