A country that is a net international debtor initially experiences:

Related MCQs

• Country A has 100 units of labor and Country B has 200 units of labor. Both countries produce computers and Web pages. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 Assume free trade exists and that the relative price is such that both countries specialize completely in the industry in which they have a comparative advantage (neither country produces both goods). The supply of computers relative to Web pages will be:
• Country A and Country B produce computers and Web sites. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 At which of the following relative prices (computers in terms of Web sites) will Country B produce both goods under free trade?
• Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land. Note that wages are the returns to labor and rents are the returns to land. According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B.
• The balance of international indebtedness is a record of a country’s international:
• The _______________ records all international financial transactions that involve resident of the country concerned- changing either his assets with or his liabilities to a resident of another country.
• Assume a two-country world: Country A and Country B. Which of the following is correct about purchasing power parity (PPP) as related to these two countries?
• Unlike the balance of payments, the balance of international indebtedness indicates the international:
• Perfect international capital mobility suggests that international funds will be responsive to _____________ differentials
• Concerning the U.S. balance of payments, which account is defined in essentially the same way as the net export of goods and services, which comprises part of the country’s gross domestic product?
• When each international transaction undertaken by the residents of a country are entered as a debit and credit entry of equal size, into the balance of payments, the method is known as.