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1) The pattern of economic growth describes the phenomenon of countries moving up in technological development by following the patterns of countries ahead of them in the development process ? a. flying geese b. import substitution c. export orientation d. commodity expansion
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2) Developing countries that concentrate production in agricultural products or raw materials may face a long-run decline in their international terms of trade because of ? a. inelastic demand for these products in advanced countries b. large increases in the supplies of these products on world markets because of export expansion policies c. sluggish demand for these products in advanced countries d. All of the above
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3) An export quota agreement to stabilize the price of bauxite tends to be more successful when the member producer countries as a percentage of the world’s producer countries is __________ and the _________ it is for the member producer countries to store/stock pile bauxite? a. relatively small; more difficult b. relatively small; easier c. relatively large; more difficult d. relatively large; easier
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4) Suppose that the demand curve for tin is highly inelastic. If the supply curve of tin decrease and increase cyclically along the demand curve for tin then in this market the size of the price fluctuation will be __________ the size of the quantity fluctuations? a. relatively greater then b. relatively less than c. the same as d. any of the above
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5) In the Px = export price index, Pm = import price index, Qx = export quantity index,and Qm = import quantity index. Developing countries tend to maintain that their commodity term of trade have declined over the long run suggesting that _________ has declined? a. Px/Pm b. Pm/Px c. (Pm/Px)Qm d. (Px/Pm)Qx
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6) _________ policies attempt to foster industrialization by establishing high barriers to imports of foreign goods to promote local production ? a. absolute advantage b. comparative advantage c. export-led growth d. import substitution
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7) Export-led growth strategies tend to emphasize ? a. resource allocation based on the principle of absolute advantage b. resource allocation based on the principle of comparative advantage c. trade protection for import-competing firms d. trade protection for exporting-competing firms
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8) Import substitution is an example of ? a. the principle of comparative advantage b. the principle of absolute advantage c. an outward-looking growth strategy d. an inward-looking growth strategy
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9) Because supply and demand conditions for primary products are very price inelastic their prices ? a. have been steadily rising in recent decades b. have been more stable than the prices of manufactured goods c. fluctuate about as much as the prices of manufactured goods d. tend to be very unstable from year to year
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10) Which of the following strategies have developing countries not used to deal with the problem of unstable export markets ? a. multilateral contracts b. production and export controls c. buffer stock arrangements d. tariff-rates quotas
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