A country's balance of gold, hard currencies and special drawing rights used to settle international transactions are defined as:

• A.Current account
• B.International reserves
• C.Terms of trade
• D.Balance of payments

The Neoclassical model of free trade which says that countries will specialize in the production of commodities that make use of their abundant factors of production is called:

• A.Globalization
• B.South-South Trade and Economic Integration
• C.Economic integration
• D.Factor Endowment Trade Theory

International reserves are increased with:

• A.deposits representing net export sales and capital inflows
• B.withdrawals representing net export sales and capital outflows
• C.Withdrawals representing net export sales and capital inflows
• D.deposits representing net export sales and capital outflows

The existence of market imperfections such as monopoly power, lack of factor mobility, externalities, and lack of knowledge that weakens the functioning of a market economy is:

• A.Public goods
• B.Mixed economies
• C.Economic planning
• D.Market failure

Policy options to address a balance of payments deficit include:

• A.reduce exports or increase imports through a currency appreciation
• B.expand exports or limit imports through a currency appreciation
• C.reduce exports or expand imports through a currency devaluation
• D.expand exports or limit imports through a currency devaluation

Export Earnings Instability, or the wide fluctuations in developing country earnings on commodity exports are a result of:

• A.high price elasticity of demand and high income elasticity of demand
• B.low price elasticity of demand and high income elasticity of demand
• C.low price elasticity of demand and low income elasticity of demand
• D.high price elasticity of demand and low income elasticity of demand