Practice International Economics Questions and Answers

• Suppose your data produces the regression result y = 10 +3x. Scale y by multiplying observations by 0.9 and do not scale x. The new intercept and slope est...
• In a multiple regression model, the Durbin-Watson test statistic is 1.3, while the critical lower and upper values are 1.5 and 1.7 respectively. This impli...
• In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending ______
• Let X1, X2 and X3 are three (Pairwise) uncorrelated random variables. The mean & variance of each variable is 0 and 3, respectively. Find the correlation b...
• GDPf = Gross Domestic Product at Factor Cost; GDPm = Gross Domestic Product at Market Price; NNPf = Net National Product at Factor Cost; C = Consumption; I...
• An analyst has data on wages for 100 individuals. The arithmetic mean of the log of wages is the same as:
• Suppose your data produces the regression result y = 10 +3x. Scale y by multiplying observations by 0.9 and do not scale x. The new intercept and slope est...
• In a multiple regression model, the Durbin-Watson test statistic is 1.3, while the critical lower and upper values are 1.5 and 1.7 respectively. This impli...
• In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending ______
• Let X1, X2 and X3 are three (Pairwise) uncorrelated random variables. The mean & variance of each variable is 0 and 3, respectively. Find the correlati...
• GDPf = Gross Domestic Product at Factor Cost; GDPm = Gross Domestic Product at Market Price; NNPf = Net National Product at Factor Cost; C = Consumption; I...
• The Marshall-Lerner condition states that a currency devaluation will improve the trade balance only if:
• The 'Principle of Maximum Social Advantage' (Dalton) states that the state should collect taxes and spend money until:
• Under the Ricardian model, comparative advantage is determined primarily by differences in:
• If country A can produce one unit of wheat by sacrificing 2 units of cloth while country B sacrifices 4 units of cloth, country A has comparative advantage...
• In the Heckscher-Ohlin framework, a capital-abundant country tends to export goods that are:
• A tariff imposed by a small country on imports of a competitive good generally:
• If the domestic currency depreciates, holding other things constant, exports tend to become:
• The Marshall-Lerner condition is associated with the possibility that currency depreciation improves the trade balance when:
• Under uncovered interest parity, a country with a relatively higher interest rate is expected, other things equal, to experience:
• A current-account deficit financed by a capital-account surplus illustrates that:
• The terms of trade of a country improve when:
• The WTO principle of most-favoured-nation treatment broadly requires members to:
• If the opportunity cost of producing one unit of X is lower in country A than country B, country A has comparative advantage in:
• A production subsidy to an export industry in a small country tends to:
• The Stolper-Samuelson theorem links an increase in the relative price of a good to an increase in the real return of the factor used:
• The Rybczynski theorem states that, at constant goods prices, an increase in one factor endowment tends to:
• An appreciation of the domestic currency, other things equal, tends to make imports:
• A J-curve effect refers to the possibility that after depreciation the trade balance:
• Under a currency board, domestic money issuance is closely tied to:
• The balance-of-payments identity implies that, with errors and omissions ignored, the current account plus the financial/capital account and reserve change...
• A quota differs from a tariff because a quota directly restricts:
• An improvement in a country's terms of trade means that, for a given volume of exports, the country can obtain: