1 The optimal import tariff of a large country under perfect competition increases, when the elasticity of foreign export supply decreases.

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2 Under perfect competition, export subsidies always result in a terms-of-trade loss.

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3 The exchange rate of euros per pound is 1.2 and the exchange rate of yens per pound is 130. What should be the exchange rate of yens per euro?

4 A large country may benefit from import tariff under perfect competition because the tariff affects the terms of trade.

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5 With imperfect competition, it is possible that a small country benefits from import tariff.

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6 The annual interest rate in interest rate in Germany (part of Euroarea) is 1%, the annual interest rate in United States is 3% and the spot exchange rate (euros per dollar) is 0.7. What is the expected spot exchange rate (in euros per dollar) after one year if the uncovered interest parity holds?

7 An import tariff of a small country under perfect competition has no effect on terms of trade.

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8 Game theory is used to analyze a perfectly competitive market

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9 Import tariff and equivalent import quota always result in the same welfare effects.

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10 Yen-nominated interest rate on Japanese bonds is 4% and dollar-denominated interest rate on U.S. bonds is 2%. According to uncovered interest parity the U.S. dollar is expected to appreciate against the Japanese yen.

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11 According to relative purchasing power parity, real exchange rate should equal unity.

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12 Economic theory predicts that common resources such as fish in the ocean may be over-harvested if there is no regulation.

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