Which of the following is true of intra-industry trade?
A. Intra-industry trade is said to occur when the United States exports Ford automobiles and imports Honda automobiles.
B. Intra-industry trade is mostly based on the differences stressed in the Heckscher-Ohlin trade theory.
C. Intra-industry trade is usually discouraged by the government.
D. Intra-industry trade is said to occur when the United States exports Ford automobiles and imports petroleum.
Answer: A
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The starting point for understanding how exchange rates are determined is a simple idea called ________, which states: if two countries produce an identical good, the price of the good should be the same throughout the world no matter which country
produces it. A) Gresham's law B) the law of one price C) purchasing power parity D) arbitrage
If the interest rate is 10 percent, the net present value of $600 to be received two years from now is
a. $495.87. b. $545.45. c. $600. d. $660.
The United States is the world's leading grain-producing nation. Exporting U.S. grain causes the
a. domestic consumption of grain to rise because of the added foreign demand. b. price of grain in the domestic market to fall because foreigners are now taking some of the domestic demand. c. price of grain to domestic consumers to rise because of the added foreign demand. d. standard of living of foreigners to fall because they lose purchasing power.
The consumer price index or CPI includes
A) The cost of a standard market basket bought by consumers in the current year. B) The cost of a standard market basket bought by consumers in the current year relative to a base period. C) The cost of a standard market basket bought by producers in the current year. D) The cost of a standard market basket bought by producers in the current year relative to a base period.