Podcast
Questions and Answers
Which of the following statements is false?
Which of the following statements is false?
Which of the following statements is false?
Which of the following statements is false?
According to the theory of comparative advantage, countries will gain from trade because:
According to the theory of comparative advantage, countries will gain from trade because:
Which of the following statements is false?
Which of the following statements is false?
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Which of the following statements is not a proposition of the theory of similar demand by Linder?
Which of the following statements is not a proposition of the theory of similar demand by Linder?
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Study Notes
Multiple Choice Questions
Comparative Advantage and Trade Theories
- The Balassa index measures comparative advantages and can be linked to a classical trade theory.
- The Leontief paradox was a test of the Heckscher-Ohlin theory and concluded that the US imported capital-intensive goods.
- Technological differences and multiple countries are two relaxations of the Heckscher-Ohlin (HO) model, which increased its explanatory power.
- Examining the lobbying and voting behavior of different sectors in relation to free trade and protectionism served to support the Heckscher-Ohlin-Vanek (HOV) model.
Gains from Trade
- Countries will gain from trade because world output will increase if each country specializes in what it is relatively best at.
- Specialization leads to increased output per worker in every company.
Temporary Comparative Advantage
- The question gap with R&D efforts leads to a temporary comparative advantage.
- The first phase in the production of a new, expensive product often takes place in capital-rich, high-wage countries.
- In the saturation phase of the product life cycle, production processes have been standardized.
Theory of Similar Demand
- Imports in a country are determined by GDP/capita, according to the theory of similar demand by Linder.
- Demand in a country is determined by GDP/capita.
- Exports to countries with similar GDP/capita as the country of origin are proposed by the theory.
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Description
Test your knowledge of international trade theories, including comparative advantages, classical trade theories, and more.
