C h a p t e r7I n t e r n a t i o n a l F a c t o r M o v e m e n t s Multiple Choice Questions
1. Which of the following differs in its essential analytical framework
(a) I nternational trade in goods
(b) I nternational conflict resolution
(c) I nternational trade in services
(d) I nternational trade in factors of production
(e) I nternational borrowing and lending
Answer: B
2. The slope of the production function measures
(a) t he physical increase in output as country grows.
(b) t he dollar-value increase in output as a country grows.
(c) t he increase in number of workers as immigration proceeds.
(d) t he marginal product of labor.
(e) t he marginal product of capital.
Answer: D
3. International free labor mobility will under all circumstances
(a) i ncrease total world output.
(b) i mprove the economic welfare of everyone.
(c) i mprove the economic welfare of workers everywhere.
(d) i mprove the economic welfare of landlords (or capital owners)
everywhere.
(e) N one of the above.
Answer: E
4. If the world attained a perfect Heckscher-Ohlin model equilibrium with
trade, then
(a) w orkers in the labor abundant country would migrate to the capital
abundant country.
(b) w orkers in the labor abundant country would wish to migrate to the
capital abundant country.
(c) w orkers in the labor abundant country would have no desire to migrate
to the capital abundant country.
(d) w orkers in the capital abundant country would wish to migrate to the
labor abundant country.
(e) w orkers in the capital abundant country would migrate to the labor
abundant country.
Answer: C
5. During the mass migration period of late 19th-early 20th centuries,
(a) w ages rose in the origin countries and fell in the destination
countries.
(b) w ages fell in the origin countries and rose in the destination
countries.
(c) w ages generally rose faster in the origin countries.
(d) w ages generally rose faster in the destination countries.
(e) w ages generally fell faster in the origin countries.
Answer: C
6. International borrowing and lending may be interpreted as one form of
(a) i ntermediate trade.
(b) i nter-temporal trade.
(c) t rade in services.
(d) u nrequited international transfers.
(e) N one of the above.
Answer: B
7. The relative price of future consumption is
(a) t he interest rate.
(b) u nknown at any given time.
(c) t he real interest rate.
(d) t he relative interest rate.
(e) N one of the above.
Answer: C
8. A country that has a comparative advantage in future production of
consumption goods
(a) w ill tend to be an international borrower.
(b) w ill tend to have low real interest rates.
(c) w ill tend to be an international investor or lender.
(d) w ill tend to have good work ethics.
(e) N one of the above.
Answer: A
9. A . multinational corporation
