The NAFTA arrangement between the USA, Canada and Mexico should have had which of the following effects compared with the pre-agreement situation?

A.

An increase in exports and imports between each of the three countries

B.

An increase in the price of Canadian and Mexican goods sold in the USA

C.

An increase in the price of US goods sold in Canada and Mexico

D.

All of the above

Under the WTO's 'most favoured nation' clause

A.

a country that receives a trade concession from another is then entitled to receive the same concession from all other signatories.

B.

countries can make special deals with other countries provided that they are agreed with the WTO.

C.

exports from favoured nations will be subject to lower tariffs than from other nations.

D.

any trade concession that a country makes to one member must be granted to all signatories.

The international agreement signed by 23 countries in 1947 to promote the liberalisation of foreign trade was known as

A.

GATT.

B.

IMF.

C.

WTO.

D.

UNESCO.

Which of the following is NOT a valid argument for protection?

A.

To allow older industries with a potential comparative advantage a chance to make significant investments

B.

To keep declining industries going in the long run in order to safeguard jobs

C.

To allow infant industries to survive foreign competition

D.

To prevent dumping by other countries from giving them an unfair advantage over domestic suppliers

When countries specialise in producing those goods in which they have a comparative advantage, they

A.

maximise their combined output, but they do not necessarily allocate their resources more efficiently.

B.

do not necessarily maximise their combined output, and they also do not necessarily allocate their resources more efficiently.

C.

maximise their combined output and allocate their resources more efficiently.

D.

allocate their resources more efficiently, but they do not necessarily maximise their combined output.

A tariff is

A.

the difference between the price a product sells for in the country it is produced in and the price it is sold for in another country.

B.

a tax on imports.

C.

a limit on the quantity of a good that can be imported into a country.

D.

a government payment made to domestic firms to encourage exports.

For a given amount of resources, Japan and the UK can produce the following quantities of motorbikes or bicycles: u\" Which statement is correct? m A. The UK has a comparative advantage in motorbikes. B.The UK has a comparative advantage in bicycles. m C. Japan has a comparative advantage in bicycles. m D. The UK has an absolute advantage in bicycles. A tariff imposed on imported shoes will cause the domestic price of shoes to and the domestic production of shoes to a A increase, decrease a B increase, increase a C decrease, increase a D decrease, decrease Which of the following statements are correct? (i) Export growth uctuates more than GDP growth. (ii) The average rate of growth in exports from 1955 to 2011 has been higher than the average rate of growth in GDP. (iii) The years when the rate of growth in GDP is the higher than average tend to be the same years that the rate of growth in exports is higher than average. m A. (i). (ii)and (iii) A 3.0) and (iii) only n C. (i) only A D. (ii) and (iii) only The following chart shows world growth in GDP and the real value of exports. 14 12 Annual % change -Exports -ODP -12 1955 1950 1965 1970 1975 1 960 1985 1990 1995 2000 2005 2010 2015 2020 Atire: Data from 2017-20 based on forecasts Source: Based on data in World Economic Outlook (UF)If two countries, A and B, can produce the following amounts of two goods X and Y for a given amount of resources: Assuming there are no transport costs in trade. a A. Country A has a comparative advantage in the production of good X and will import good Y. (W B. Country A has a comparative advantage in the production of good Y and will export good Y. a C. Country A has a comparative advantage in the production of good X and will export good Y. m D. Country B has a comparative advantage in the production of good Y and will import good Y