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INT711S-INTERNATIONAL TRADE-1ST OPP-JUNE 2022 |
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nAmI BIA un IVERSITY
OF SCIEn CE Ano TECHn OLOGY
FACULTY OF 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
EXAMINER(S)
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
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.
PERMISSIBLE MATERIALS
1. PEN,
2. PENCIL
3. CALCULATOR
THIS QUESTION PAPER CONSISTS OF 5 PAGES (Including this front page)
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·SECTIOAN: MULTIPLE-CHOIQCEUESTIONS
[40 MARKS]
Write onlythe numberandthe letter representingyour choicein capsi.e.,1.A, 2. B3. C4. D etc.
1. Theinstitutionalframework developedin 1947to promotetrade liberalizationis knownas
a) the WTO
b) the GATT
c) the IMF
d) the World Bank
2. Accordingto the theory of comparativeadvantagew, hich of the following is not a reasonwhy
countriestrade?
a) Comparativeadvantage.
b) Costsare higherin onecountrythan in another.
c) Theproductivityof labor differs acrosscountriesandindustries.
d) Exportsgive a countrya political advantageover other countriesthat export less.
3. Whenseveral countriesjointly imposecommonexternaltariffs, eliminatetariffs on eachother,
and eliminatebarriers to the movementof labor andcapitalamongthemselves,they have
formed a/an
a) free trade area
b) customsunion
c) commonmarket
d) economicunion
4. A tariff can
a) never
b) sometimes
c) always
d) Permanently
raise a country'swelfare
5. Whichof the following statementswould a mercantilistnot agreewith?
a) Importsare desirable.
b) Tradeis a zero-sumactivity.
c) Thepurposeof trade is to amassrevenuesfrom exports.
d) A countrycanbenefitby grantingmonopolyrights to individuals.
6. Whichroundof internationaltrade negotiationsresultedin the creationof the WorldTrade
Organization?
a) KennedyRoundof 1964-196b7.
b) TokyoRoundof 1973-1979
c) UruguayRoundof 1986-1993
d) DohaRoundof 2003-2007
7. Accordingto the theory of comparativeadvantagea, countrywill exporta goodonly if:
a) Its productivityis higher in producingthe goodthanthe productivityof other countriesin
producingit.
b) Its wagerate in producingthe goodis lower than in other countries.
c) Its cost of producingthe good,relativeto other goods,is at least as low as in other countries.
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d) All of the above.
8. TheHeckscher-Ohlintheory explainscomparativeadvantageas the result of differencesin
countries':
a) Economiesof large-scale production.
b) Relativeabundanceof variousresources.
c) Relativecostsof labor.
d) Researchanddevelopmentexpenditures.
9. Tradecreationtakes placewhen
a) a countrymovesfrom autarkyto free trade
b) a movementto a customsunionreducesthe costsof trade throughstandardization
c) economicintegrationresults in a movementin productoriginto a lower-cost membercountry
d) economicintegrationresults in a shift in productorigin from a lower-cost, nonmembercountry
to a membercountry havinghighercosts
10. Accordingto the theory of comparativeadvantagec, ountriesgainfrom trade because
a) Trademakesfirms behavemorecompetitively,reducingtheir market power.
b) Outputper worker in eachfirm increases.
c) Worldoutput can rise wheneachcountryspecializesin what it doesrelatively best.
d) Everycountry hasan absoluteadvantagein producingsomething.
11. TheNAFTAisa:
a) monetaryunion
b) free trade area
c) commonmarket
d) customsunion
12. A mainadvantageof specializationresultsfrom:
a) Economicsof large scale production
b) b.Thespecializingcountrybehavingas a monopoly
c) c. Smaller productionruns resultingin lower unit costs.
d) d. Highwagespaidto foreignworkers
13. Internationaltrade is basedon the ideathat:
a) Exportsshouldexceedimports
b) Importsshouldexceedexports
c) Resourcesare more mobileinternationallythan are goods
d) Resourcesare less mobileinternationallythan are goods
14. Mosttariffs have:
a) only revenueeffects
b) only protectiveeffects
c) bothprotectiveand revenueeffects
d) neitherprotectiveor revenueeffects
15. Whenonecountryprovidesmostfavorednationstatus(normaltrade relations)for another,it
agreesto
a) chargethat nation'sproductsa lower tariff than anyother nation's
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b) chargethat nation'sproductsa tariff rate no higherthan that on any other nation
c) chargethat nation'sproductsa highertariff than anyother nation's
d) exportsto that nationanyproductsthat it wantsto purchase
16. If internationaltrade takes placeas a result of comparativeadvantage,it will causewhich of the
following effects in the participatingcountries?
a) Inequalityamonghouseholdswill be reduced.
b) Theaveragewell-being of peoplein bothcountrieswill increase.
c) Bothcountrieswill grow faster over time.
d) All of the above
17. Mercantilism
a) Is the philosophyof free internationaltrade.
b) Wasa systemof export promotionandbarriers to importspracticedby governments.
c) Waspraisedby AdamSmithin TheWealthof Nations.
d) Both(a) and(c).
18. 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
19. If Namibiawishesto reduceits current accountdeficit would be advisedto:
a) Engagein moregovernmentspending.
b) Reducegovernmenttax.
c) Decreasedomesticconsumptionspending.
d) Increaseprivate investmentspending.
20. A primary reasonwhy nationsconductinternationaltrade is because:
a) Somenationsprefer to produceonething while othersproduceanother
b) Resourcesare not equallydistributedto all trading nations
c) Tradeenhancesopportunitiesto accumulateprofits
d) Interestrates are not identicalin all trading nations
SECTIO8N: STRUCTURQEDUESTIONS
QUESTION 1 (30 MARKS]
[60 MARKS]
1. What is the difference between the main arguments by David Hume and Adam Smith
on their critique of Mercantilism?
(15)
2. Explain briefly what happens to the trade balance when demand is price inelastic,
according to the price-specie-flow mechanism.
(5)
3. One of the assumptions made by David Hume in criticising Mercantilism is that there
is a link between money and prices. Explain this assumption briefly.
(10)
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QUESTION2
[30 MARKS]
1. Select two of the post H-O theories of international trade explain each of them in
details, discuss their similarities and differences
(20)
2. Elaborate on the following terms:
a) Balance of Payments
(5)
b) Absolute Advantage
(5)
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