ECON 645 Final Exam UPDATED ACTUAL Questions and CORRECT Answers
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Course
ECON 645
Institution
ECON 645
ECON 645 Final Exam UPDATED
ACTUAL Questions and CORRECT
Answers
If the United States had its way, it would demand that Japan spend more money on basic
research in science and less on applied research into industrial applications. Explain why in
terms of the analysis of appropriability. - ...
ECON 645 Final Exam UPDATED
ACTUAL Questions and CORRECT
Answers
If the United States had its way, it would demand that Japan spend more money on basic
research in science and less on applied research into industrial applications. Explain why in
terms of the analysis of appropriability. - CORRECT ANSWER✔✔- The benefits to the
United States of Japanese basic research would exceed the benefits from Japanese research
targeted to specific problems in Japanese industries.
Which of the following is not a key assumption that allows strategic trade policy to work
effectively in the Brander-Spencer example of Airbus and Boeing? - CORRECT
ANSWER✔✔- A subsidy enables both firms to operate profitably
Brander-Spencer analysis states that - CORRECT ANSWER✔✔- monopoly profits can be
moved from one country to another by a government subsidy
In 2002 some European countries threatened to deny permission to land airplanes for airlines
that enjoy a government subsidy. The countries claimed that the threat was targeted against
Swissair, which was bailed out by the Swiss government. However, it coincided with the
U.S. imposing a tariff on steel imports and U.S. government compensation to the airlines for
their losses due to the September
11th
attack and increased security. Such a threat by the Europeans is an example of - CORRECT
ANSWER✔✔- A trade policy that could lead to a trade war
Some retailers in advanced countries sell products from developing countries with low wages
but assure customers that these goods are produced under tolerable working conditions. Is
demanding that kind of guarantee the same thing as putting a tariff on low-wage exports?
Demanding the working conditions guarantee - CORRECT ANSWER✔✔- is different than a
tariff because it increases consumer demand
Demanding tolerable working conditions - CORRECT ANSWER✔✔- could benefit overseas
workers if they are paid higher wages
, What is the main reason for the anti-globalization movement in the late 1990s? - CORRECT
ANSWER✔✔- Increasing manufacturing exports from low-wage countries
What is the main problem with imposing environmental standards? - CORRECT
ANSWER✔✔- They can cause potential export industries to shut down in poor countries
Why do people argue that WTO undermines national sovereignty? - CORRECT
ANSWER✔✔- WTO monitors some domestic policies that affect trade
Many countries have value-added taxes—taxes that are paid by producers, but are intended to
fall on consumers. (They're basically just an indirect way of imposing sales taxes.) Such
value-added taxes are always accompanied by an equal tax on imports; such import taxes are
considered legal because, like the value-added tax, they're really an indirect way of taxing all
consumer purchases at the same rate. Compare this situation to the argument over carbon
tariffs.
Which of the following statements regarding carbon tariffs is true? - CORRECT
ANSWER✔✔- An objection over carbon tariffs is that they may be discriminating between
domestic and foreign goods
A pollution haven is said to exist when - CORRECT ANSWER✔✔- an economic activity
becomes concentrated in countries or regions having less strict environmental controls than
elsewhere.
The relationship showing that damage to the environment increases as a country's per capita
income rises from an initially low level but then falls with further increases in its per capita
income is known as the environmental - CORRECT ANSWER✔✔- Kuznets curve
Our usual models of trade assume that jobs lost in one industry will be offset by jobs gained
in other industries. The Autor et al. paper argued, however, that communities that lose
manufacturing jobs to imports end up losing other jobs as well. Is this a contradiction?
The Autor et al. paper - CORRECT ANSWER✔✔- does not contradict our usual models
because the gains and losses from trade may not occur in the same place
The economic analysis of international trade says that specialization and free trade -
CORRECT ANSWER✔✔- increases welfare for a country as a whole, but can also create
losers as well as winners by shifting the distribution of income within the country
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