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Flashcards in the nation in the world economy Deck (9):
1

The diagram depicts the supply curve in the exporting country and the demand curve in the importing country in a market for a traded good. Assume that none of the good is consumed in the exporting country and none of the good is produced in the importing country. You can click on the figure to enlarge it.

Based on this information, which of the following statements is correct?

the price gap represents the trade costs, such as transportation costs and trade tax

2

The figure shows an index representing impediments to trade in the commodity market. A higher index represents more impediments - in other words less globalisation. You can click on the figure to enlarge it.

Based on this information, which of the following statements are correct?

1) attempts by countries to adress their unemployment problems post 1929 great depression seemed to have decreased globalisation
2) the graph suggests that commodity market intergration over the past 150 years was one of interupted intergration

3

Which of the following statements is correct regarding current accounts?

an increase in the official aid payment means a lower current account

4

he diagram depicts the level of immigration into the US as a percentage of the change in the US population. You can click on the figure to enlarge it.

Based on this information, which of the following statements is correct?

in the decade prior to the first world war the number of immagrants was higher then the number of births - number of deaths

5

The diagram shows Carlos’s and Greta’s feasible production frontiers and their utility-maximising choices of consumption between wheat and apples under autarky (no trade). You can click on the figure to enlarge it.

Based on this information, which of the following statements is correct?

greta can consume 3750 apples and 2500 bushels of wheat but will choose not to do so

6

The figure depicts the feasible frontier and the consumption frontier of Carlos and Greta if they specialise and trade. The resulting relative price of wheat is assumed to be 2. You can click on the figure to enlarge it.

Let the resulting consumption be at A and B, respectively, for Greta and Carlos. Then which of the following statements is correct?

carlos trades 4000 of his apples for 2000 bushels of gretas wheat

7

The diagram shows Alex’s and Jose’s feasible production frontiers for oranges and melons. You can click on the figure to enlarge it.

Based on this information, which of the following statements are correct?

1) joe has absolute advanatge in both production of melons and oranges
2) joe will specialise in the production of oranges whilst alex will specialise in the production of melons

8

The diagram describes the effects of trade on the capitalists and the workers in Germany and China. You can click on the figure to enlarge it.

The initial size of the economies are normalised to one. Germany has the comparative advantage in the capital-intensive goods, while China has the comparative advantage in the labour-intensive goods. As a result of the trade Germany’s economy is assumed to grow by 30% and that of China by 40%.

Based on this information, which of the following statements is correct?

in germany, the capatlists are better off whilst the workers are worse off in the trade

9

he figure shows a labour market model describing short-run and long-run impacts of immigration on the domestic labour market. You can click on the figure to enlarge it.

The labour market pre-immigration is at A, with the number of employed and unemployed at 4 million and 1 million, respectively. Immigration increases the total labour force to 5.5 million. According to this model, which of the following statements is correct?

if all the immagrants are entruenpreurs with plans to start a business, then there may not be any short term impact on the incumbent workers