LEA Reviewer – International Trade Exam
- Question of
Ultimate consumption of the division of labor
- specialization
- trade
- self-sufficiency
- autarky
- Question of
Says that a country tends to produce for an export those products, which it can be produced most cheaply and to import those products, which other countries can produce most cheaply.
- comparative advantage
- specialization
- trade
- barter
- Question of
This represents the value of domestic resources spend in saving or earning a unit of foreign exchange as a proportion of its actual exchange rate
- domestic resources
- private sector cost
- private profitability
- social profitability
- Question of
The Domestic Cost Ratio (DRC) is divided with __ to come up with the resource ratio (RCR)
- actual exchange rate
- shadow exchange rate
- domestic currency value
- foreign currency value
- Question of
If the RCR coefficient is less than 1 then the economic activity has a
- comparative advantage
- comparative disadvantage
- neutral advantage/disadvantage
- cannot tell
- Question of
This means that if the crop is being currently imported like yellow corn then
- the country can earn foreign exchange if it will be exported abroad
- the country can save foreign exchange by producing the product domestically
- the country has no choice but to sell the products to ASEAN countries
- the country has to join WTO to be competitive
- Question of
On the other hand if the DRC coefficient is greater than one, it is better for the country to
- export yellow corn
- import yellow corn
- import other feeds
- increase tariff on corn
- Question of
Tariff is imposed on
- an imported commodity
- an exported commodity
- persons
- in finished goods only
- Question of
Once tariff is imposed the price of the imported commodities will
- decrease
- increase
- remain the same
- be uncertain
- Question of
Shows the difference in final price of the finished goods before and after imposition
- nominal protection
- effective protection rate
- implicit tariff
- none of the choices
- Question of
Shows by how much the value added in the industry can exceed the value added in the absence of protection
- nominal protection
- effective protection
- implicit tariff
- none of the choices
- Question of
The effective protection rate (ECR) includes the tariff on
- a. finished goods
- b. intermediate inputs
- c. luxury products
- d. both a and b
- Question of
Measures the rates by which domestic price of an input or output face by producers deviates from the world or border price
- nominal protection
- effective protection rate
- implicit tariff
- government protection
- Question of
The replacement of foreign production with foreign production
- import substitution
- transfer effect
- protective effect
- revenue effect
- Question of
The additional economic rent paid to the pre-existing domestic producers plus the rent paid to new producers above their supply price
- import substitution
- transfer effect
- consumption effect
- revenue effect
- Question of
The size of the protective effect is determined by
- elasticity of supply
- elasticity of demand
- income elasticity of demand
- cross price elasticity of demand
- Question of
A tariff designed for protection must provide rates of duties high enough to achieve this objective
- the encouragement of additional domestic production which could not take place because of prevailing cost disadvantages
- create a home market for the product
- increase labor share to national income
- increase employment
- Question of
The most valid reason why a government imposes tariff for protection
- protection for industries
- creation of home market
- raise government
- protection of infant industries
- Question of
A direct source of monopoly profit
- non-tariff barriers
- quota
- tariff
- dumping
- Question of
The Philippines tariff structure at the beginning of 1980 indicated that
- export were penalized, both a manufacturing sector and other sectors esp. agriculture
- Agriculture receive the highest level of protection
- export industries enjoyed the protection system
- backward integration of the industrial structure was encourage
- Question of
Country or group of countries with the highest non-tariff barriers imposed on the Philippines
- Japan
- US
- Taiwan
- European or EU countries
- Question of
The case for the protection of infant industries rests on the assumption of
- efficiency
- inability
- latent comparative advantage
- revenue gain
- Question of
Consists of a group of countries that have abolished al tariff among them, but maintain their individual tariffs vis-à-vis the outside world.
- free area trade
- customs union
- common market
- economic union
- Question of
An example of free trade area
- AFTA
- EEC
- WTO
- EU
- Question of
The European Union is an example of
- free trade area
- customs union
- common market
- economic union
- Question of
The summary of all economic transactions between the residents of one country vis-à-vis the rest of the world
- balance of payments
- balance of trade
- summary of trade
- WB-IMF accounting
- Question of
Final adjustments made by authorities to settle imbalances in the balance of payments
- compensatory financing
- official statements
- devaluation
- borrowing
- Question of
The account tells whether the country had earned more than it had paid out
- current account
- capital account
- merchandise trade account
- official statements
- Question of
Otherwise known as “invisibles” in the BOP account
- merchandise trade
- non-merchandise trade
- capital account
- official account
- Question of
An example of an invisible trade
- OFW remittances
- Loans and borrowing
- Foreign investments
- Export and import
- Question of
As such there are ___ components in the BOP (Balance of Payments) account
- two
- three
- four
- five
- Question of
If there is a persistent BOP deficit, what usually takes place to correct the imbalance?
- a. exchange rate depreciation
- b. exchange rate appreciation
- c. import and foreign exchange control
- d. both a and c
- Question of
Depreciation is an expenditure switching approach, thus it has to be accompanied
- expenditure reducing
- expenditure enhancing
- export promotion
- nothing will be effective
- Question of
With depreciation
- a. exports will become cheap in the eyes of the foreign buyers
- b. export will become expensive
- c. imports will become expensive domestically
- d. all of the above
- e. both a and c
- Question of
System of cultivation using large amounts of labor and capital relative to land area
- agriculture
- extensive agriculture
- intensive agriculture
- farming
- Question of
System of cultivation using small amounts of labor and capital in relation to the area of the land being farmed
- agriculture
- extensive agriculture
- intensive agriculture
- farming
- Question of
This implies that under this system of cultivation there are smaller land areas available
- agriculture
- extensive agriculture
- intensive agriculture
- farming
- Question of
The steady process by which the productive capacity of the economy is increased over time to bring about rising levels of national income
- economic growth
- economic development
- economic efficiency
- economic good
- Question of
The process of improving the quality of all human lives
- economic growth
- economic development
- economic efficiency
- economic good
- Question of
The important aspect of development is
- raising people’s living levels i.e. income and consumption level of food, medical services, education through relevant economic processes
- creating conditions conducive to the growth of people’s self esteem through the establishment of social, political and economic systems that promote human dignity and respect
- increasing people’s freedom to choose by enlarging the range of their choices e.g. increasing varieties of consumer goods and services
- all of the choices
Responses