When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?

Related Mcqs:

1. Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?

   A. relatively high; relatively large
   B. relatively high; relatively small
   C. relatively low ; relatively large
   D. relatively low ; relatively small

2. An agreement between a borrower country and the International Monetary Fund in which the country agrees to revamp its economic policies to provide incentives for higher export earnings and lower imports is a ?

   A. debt rescheduling agreement
   B. debt service agreement
   C. program for growth
   D. stabilization program

3. Micheal Roemer’s three-sector model shows that growth in the booming export sector I- reduces the price of foreign exchange II- retards other sectors’ growth by reducing incentives to export other commodities III- reduces incentives to replace domestic goods for imports IV- raises factor and input prices for non-booming sectors ?

   A. I and III only
   B. II and III only
   C. I, II and III only
   D. I, II , III only IV

4. The demand for ice-cream is lower outside of summer causing lower demand for ice-cream salesman if they cannot find other work, this is called _______ unemployment?

   A. Regional
   B. structural
   C. seasonal
   D. demand-deficient

5. What is called the difference in the value of a nation’s imports over exports or exports over imports ?

   A. Trade deficit
   B. Trade simples
   C. Both a & b
   D. Not a nor b

6. A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?

   A. constant
   B. inelastic
   C. elastic
   D. Unitary elastic

7. A way of helping depressed regions by having lower wages lower local taxes and lower unemployment benefit has been suggested as ?

   A. market-orientated economists
   B. left-wing theorists
   C. Keynesian.
   D. new-Keynesian

8. A way of helping depressed regions by having lower wages, lower local taxes and lower unemployment benefit has been suggested as ?

   A. market orientated economists
   B. left-wing theorists
   C. Keynesian
   D. New-Keynesian

9. If A forms a customs union with B, A will import ?

   A. 400 units from B
   B. 200 units from C
   C. 200 units from each
   D. 400 units from B and 200 units from C

10. If A forms a customs union with C, the value of trade diversion will be ?

    A. $0
    B. $10,000
    C. $20,000
    D. $40,000