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INT711S- INTERNATIONAL TRADE- 2ND OPP- JUNE 2023 |
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nAmlBIA unlVERSITY
OF SCIEn CE TECHn OLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT OF ECONOMICS, ACCOUNTING AND FINANCE
QUALIFICATION: BACHELOR OF ECONOMICS
QUALIFICATION CODE: 12BECO
LEVEL: 7
COURSE CODE: INT711S
COURSE NAME: INTERNATIONAL TRADE
SESSION: JULY 2023
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S)
MR EDEN TATE SHIPANGA
MODERATOR:
MR IMMANUEL NASHIVELA
INSTRUCTIONS
1. Answer ALL questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. PEN,
2. PENCIL
3. CALCULATOR
THIS QUESTION PAPER CONSISTS OF 4 PAGES (Including this front page)
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SECTIOAN: MULTIPLE-CHOIQCEUESTIONS
[20 MARKS]
Writeonlythe numberandthe letter representingyour choicein capsi.e.,1.A,2. B3. C4. D etc.
1. Internationaltrade is basedonthe ideathat:
a) Exportsshouldexceedimports
b) Importsshouldexceedexports
c) Resourcesare more mobileinternationallythan are goods
d) Resourcesare less mobileinternationallythan are goods
2. TheNAFTAisa:
a) monetaryunion
b) free trade area
c) commonmarket
d) customsunion
3. A mainadvantageof specializationresults from:
a) Economicsof large-scale production
b) Thespecializingcountry behavingas a monopoly
c) Smaller productionruns resultingin lower unit costs.
d) Highwagespaidto foreignworkers
4. TheHeckscher-Ohlintheory explainscomparativeadvantageas the result of differencesin
countries:
a) Economiesof large-scale production.
b) Relativeabundanceof variousresources.
c) Relativecostsof labor.
d) Researchanddevelopmentexpenditures.
5. Mosttariffs have:
a) only revenueeffects
b) only protectiveeffects
c) bothprotectiveand revenueeffects
d) neither protectiveor revenueeffects
6. Whenonecountryprovidesthe mostfavorednationstatus(normaltrade relations)for another,
it agreesto
a) chargethat nation'sproductsa lower tariff than anyother nation's
b) chargethat nation'sproductsa tariff rate no higherthanthat of anyother nation
c) chargethat nation'sproductsa highertariff than anyother nation's
d) exportsto that nationany productsthat it wantsto purchase
7. If internationaltrade takes placeas a result of comparativeadvantage,it will causewhich of the
following effectsin the participatingcountries?
a) Inequalityamonghouseholdswill be reduced.
b) Theaveragewell-being of peoplein bothcountrieswill increase.
c) Bothcountrieswill grow faster overtime.
d) All of the above
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8. TheWorldTradeOrganizationis sometimescriticizedfor all of the following reasonsexcept
a) it reducesthe sovereigntyof membercountries
b) favors free trade over the quality of the environment
c) it hasno way to solvetrade disputesamongmembercountries
d) it is a "puppet"of multinationalcorporations
9. If Namibiawishesto reduceits current accountdeficit would be advisedto:
a) Engagein moregovernmentspending.
b) Reducegovernmenttax.
c) Decreasedomesticconsumptionspending.
d) Increaseprivate investmentspending.
10. A primary reasonwhy nationsconductinternationaltrade is because:
a) Somenationsprefer to produceonething while others produceanother
b) Resourcesare not equallydistributedto all trading nations
c) Tradeenhancesopportunitiesto accumulateprofits
d) Interestrates are not identicalin all trading nations
SECTIOBN:TRUEORFALSE
[20 MARKS]
1. · Mercantilismwas praisedbyAdamSmithin TheWealthof Nations.
2. Thelikely consequenceof introducinga subsidypaidto domesticproducersto protectagainst
foreign producersis to providean incentivefor producersto be efficient.
3. FreeTrademeansinternationaltrade is not left to its natural courseand it includestariffs,
quotas,or other restrictions.
4. Tradediversiontakes placewheneconomicintegrationresults in a shift in productorigin from a
lower-cost, nonmembercountryto a membercountryhavinghigher costs.
5. Internationaltrade is basedon the ideathat resourcesare lessmobileinternationallythan are
goods.
6. If the tariff is higher,then the importswill decrease.
7. A multinationalenterpriseis bestdescribedas a businessthat hasbasesabroad.
8. Thecomparativeadvantagemodelof Ricardowas basedon demandconditionsunderlying
specializationand trade.
9. Thenew world TradeorganizationWTOw, hich replacedthe GATTcameinto effectfrom 1st
January 1995.
10. Tradebetweentwo countriescanbe usefulif costratios of goodsare different.
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'SECTIOCN:STRUCTUREQDUESTIONS
[60 MARKS]
QUESTIO1N
[Total:30]
Mentionthe reasonsfor Intra-industry trade in a productcategoryand write a short explanationon
each.
(15)
2 Accordingto the Lindertheory,trade will occurin goodsthat haveoverlappingdemand.Illustratethis
theory and its implications.
(15)
QUESTIO2 N
Writebrief noteson eachof the following:
(a) Tradecreationandtrade diversion.
(b) Economicunionand monetaryunion.
(c) Implicationsof an appreciationanddepreciationof a currency.
[Total:30]
(10)
(10)
(10)
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