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INT711S-INTERNATIONAL TRADE-2ND OPP-JULY 2022 |
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nAmI BIA un IVE RSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTYOF MANAGEMENT SCIENCES
DEPARTMENT OF ACCOUNTING, ECONOMICS AND FINANCE
QUALIFICATION: BACHELOR OF ECONOMICS
QUALIFICATION CODE: 12BECO
LEVEL: 7
COURSE CODE: INT711S
COURSE NAME: INTERNATIONAL TRADE
SESSION: MAY/JUNE 2022
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
SECONDOPPORTUNITYEXAMINATION QUESTION PAPER
EXAMINER{S)
MR EDEN TATE SHIPANGA
MR ESLON NGEENDEPI
MODERATOR:
MR IMMANUEL NASHIVELA
INSTRUCTIONS
1. Answer ALL questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLEMATERIALS
1. PEN,
2. PENCIL
3. CALCULATOR
THIS QUESTION PAPER CONSISTS OF 3 PAGES (Including this front page)
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,SECTIO8N: TRUEORFALSE
[40 MARKS]
1. TheTheoryof AbsoluteAdvantageholdsthat nationscanincreasetheir economicwell-being by
specializingin the productionof goodsthey producemoreefficientlythan anyoneelse.
2. A country'stransactionswith the rest of the world are recordedin the balanceof payment.
3. A nationwishingto reduceits current accountdeficit would be advisedto engagein more
governmentspending.
4. A current accountsurplus impliesthat the countryis a net lenderto the rest of the world
5. Quotasare government-imposedlimits onthe price of goodstrade betweencountries.
6. Theinstitutionalframework developedin 1947to promotetrade liberalizationis knownasthe
WTO.
7. Absoluteadvantageis the ability of a country,individual,companyor regionto producea goodor
serviceat a lower cost per unit than the costat which anyother entity producesthat samegood
or service.
8. Multilateral trade meansonecountrycomesinto trade with morethan onecountry.
9. Thelikely consequenceof introducinga subsidypaidto domesticproducersto protectagainst
foreign producersis to providean incentivefor producersto beefficient.
10. FreeTrademeansinternationaltrade is not left to its natural courseandit includestariffs,
quotas,or other restrictions.
11. Tradediversiontakes placewheneconomicintegrationresults in a shift in productorigin from a
lower-cost,nonmembercountryto a membercountryhavinghighercosts.
12. Internationaltrade is basedon the ideathat resourcesare lessmobileinternationallythan are
good.
13. If tariff is higher,then the importswill decrease.
14. A multinationalenterpriseis bestdescribedas a businessthat hasbasesabroad.
15. Mercantilismwas praisedbyAdamSmithin TheWealthof Nations.
16. Thecomparativeadvantagemodelof Ricardowas basedon demandconditionsunderlying
specializationand trade.
17. TheStolpher-Samuelsontheory analyzesthe incomedistributioneffectsof trade in the short
run,when resourcesare immobileamongindustries.
18. Thenewworld TradeorganizationWTO.w, hich replacedthe GATTcameinto effect from 1st
January 1995.
19. Tradebetweentwo countriescan be useful if cost ratios of goodsare different.
20. A tax of 20 percentper unit of importedgarlic is an exampleof a(n)advaloremtariff.
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,SECTIOBN:STRUCTURQEDUESTIONS
[60 MARKS]
QUESTION 1
[30 MARKS]
Analyse the Mercantilist school of thought view's on trade. In light of your analysis; are these
ideas still relevant to the current international economics trends? Motivate your position.
QUESTION 2
[30 MARKS]
With the aid of a graph, elaborate and evaluate the robustness of H-0 model with emphasis
on presenting the gains from trade under the following assumptions for two countries:
a) Identical production capacity and different demands
(10)
b) Different production capacity and different consumption level
(10)
c) Different production capacity and identical demands
(10)
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