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7 Which of the following policies CANNOT improve current account deficit?
To raise interest rate. To depreciate domestic currency.
To raise tariff for foreign imports. To decrease government expenditure.
8 Regarding the Marshall Lerner Condition (M-L Condition), which of the following statements is correct?
The sum of price elasticity of foreign demand for domestic products and the price elasticity of domestic
demand for foreign products are less than 1.
Sugar and rice are products suitable for the M-L Condition.
The M-L Condition in the very short run may not be effective.
The M-L Condition in the long run may not be effective.
9 Which of the following countries does not belong to the member countries of CPTPP?
Singapore. Vietnam. New Zealand. South Korea.
10 How should a country’s deficit in international balance of payment (BOP) be solved? Which of the
following policies is incorrect?
To depreciate the deficit. To lower the government expenditure.
To raise the interest rate. To lower tariff.
11 In June 2022, South Korea’s inflation rate reaches 6%. Which of the following statements is correct?
South Korea faces a current account deficit in the first half of 2022.
Won (South Korea’s currency) depreciates too little.
The price of importing oil and food in South Korea is dropping down.
South Korea raises the interest rate too sharp.
12 The following table indicates that the labor productivity per hour on the two commodities X and Y:
Commodity
Country Commodity X CommodityY
A 1 4
B 3 6
In the Ricardian trade theory, the two countries have gains in trade after international trade. The possible
term of trade
is .
11/2 1/3 3
13 A small country imposes export tax, then .
the level of welfare will rise the domestic price will rise
the domestic producer surplus will increase the domestic consumer surplus will increase
14 In the Heckscher-Ohlin model, if Relatively Capital-abundant Country A opens trade with Relatively
Labor-abundant Country B, what would be the consequence for the labor price(w) relative to capital
price(r) in the two countries?
(w/r) rises in A and falls in B. (w/r) rises in A and also rises in B.
(w/r) falls in A and rises in B. (w/r) falls in A and also falls in B.