The way in which a country grows affects the pattern of trade of a country. True or false. Discuss
What will be an ideal response?
Growth causes a country's PPF to shift out. This has implications for both production and consumption. Since trade is the difference between production and consumption, it will tend to be affected as well. Growth can be neutral, in which case trade volumes increase, but proportionate to initial levels. Growth can be protrade biased, in which case the country tends to trade more relative to its GNP after growth, or trade can be antitrade biased, in which case it tends to trade less. All of these situations depend upon what happens to the country's overall capital/labor ratio as growth occurs as well as income elasticities of demand.
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With the increase in school attendance throughout the world, the newest challenge for development economists is increasing:
A. availability of education to children. B. the quality of education to children. C. the availability of college education. D. the consistency of education across countries.
The purpose of the IMF is to:
A. provide developing countries with short-term loans and technical assistance. B. determine monetary and fiscal policy in developing countries. C. determine exchange rates for developing countries. D. buy and sell the currencies of developing countries in order to stabilize their value.
The unemployment rate equals the number of persons:
A. unemployed divided by the number employed. B. unemployed divided by the number in the labor force. C. unemployed divided by the population age 16 and over. D. not working divided by the population age 16 and over.
When a competitive market maximizes economic surplus, it implies that the
A. quantity demanded is lower than the quantity supplied. B. marginal benefit of having the product is greater than the marginal cost. C. combined consumer and producer surplus is maximized. D. buyers are getting the maximum consumer surplus from the product.