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6.3   International Borrowing and Lending 1) International borrowing and lending may

Question : 6.3   International Borrowing and Lending 1) International borrowing and lending may : 1407625

 

6.3   International Borrowing and Lending

1) International borrowing and lending may be interpreted as one form of

A) intertemporal trade.

B) intermediate trade.

C) trade in services.

D) unrequited international transfers.

E) aid to offset trade advantages.

2) If one observes that Japan was traditionally a net foreign lender, one could conclude that relative to its international trade and financial partners

A) Japan's intertemporal production possibilities are biased toward present consumption.

B) Japan's intertemporal production possibilities are biased toward future consumption.

C) Japan's intertemporal production possibilities are larger than that of the other countries.

D) Japan's intertemporal production possibilities are not biased.

E) Japan preferred to consume beyond its production in the present.

3) Rapidly growing developing countries tend to be borrowers on the international capital markets. From this information we may surmise that they have a comparative advantage in

A) future income.

B) capital goods.

C) disposable income.

D) consumer goods.

E) present income.

4) It may be argued that theoretically, international capital movements

A) tend to hurt labor in donor countries.

B) tend to hurt the donor countries.

C) tend to hurt the recipient countries.

D) tend to hurt labor in recipient countries.

E) increase future production in donor countries.

5) The intertemporal tradeoff between present and future consumption is measured by the

A) real interest rate.

B) inflation rate.

C) nominal interest rate.

D) terms of trade.

E) rate of economic growth.

6) A fall in the real interest rate, all other things held constant, will cause a country's ________ to ________.

A) current consumption: increase

B) current consumption: decrease

C) terms of trade; improve

D) terms of trade; worsen

E) welfare level; improve

7) An increase in the real interest rate, all other things held constant, will cause a country's ________ to ________.

A) current consumption: increase

B) current consumption: decrease

C) terms of trade; improve

D) terms of trade; worsen

E) welfare level; improve

8) What is intertemporal comparative advantage?

 

 

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