ECON847 - Marketing is the activity, set of institutions, and processes for creatin - Tài liệu tham khảo | Đại học Hoa Sen

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FORMAL EXAMINATION PERIOD: SESSION 2, NOVEMBER 2016 Unit Code: ECON847 Unit Name: INTERNATIONAL TRADE Duration of Exam
2 hours plus 10 minutes reading time
(including reading time if applicable):
Part A: 10 true/false questions
Total No. of Questions:
Part B: Five short-answer questions
Part C: Two long-answer questions Total No. of Pages 5
(including this cover sheet):
GENERAL INSTRUCTIONS TO STUDENTS:
• Students are required to fol ow directions given by the Final Examination Supervisor and must refrain from communicating in any way with another student once they have entered the final examination venue.
• Students may not write or mark the exam materials in any way during reading time.
• Students may only access authorised materials during this examination. A list of authorised material is available on this cover sheet.
• Al watches must be removed and placed at the top of the exam desk and must remain there for the duration of the exam. Al alarms, notifications and alerts must be switched off.
• Students are not permitted to leave a final examination venue during the last 15 minutes of the examination.
• If it is al eged you have breached these rules at any time during the examination, the matter may be reported to a University Discipline Committee for determination. EXAMINATION INSTRUCTIONS:
This exam paper includes three parts:
Part A (worth 20 marks out of the exam total of 60 marks): There are 10 true/false questions of
equal value. Attempt ALL questions. For each question, state true or false and briefly explain. Record your answers in one booklet.
Part B (worth 20 marks out of the exam total of 60 marks): There are five (5) short-answer
questions of equal value. Attempt ALL questions. Record your answers in one booklet. Part C (worth 0
2 marks out of the exam total of 60 marks): There are two (2) questions of multiple
parts and of equal value. Attempt ONLY ONE (1) question. Record your answer in one booklet.
AIDS AND MATERIALS PERMITTED/NOT PERMITTED:
Dictionaries: No dictionaries permitte d
Calculators: No calculators permitte d Other:
Closed book – No notes or textbooks permitte d PART A
Attempt ALL questions in this part. Each question is worth 2 marks.
For each question state True or False and briefly explain why. Question 1
Strategic trade policy pursued by a country does not hurt any of the trading partners. Question 2
In a customs union, each member country can have a different tariff rate on the import of a product. Question 3
The national defense argument for protectionism says that import barriers would help the nation
to be ready to produce products that would be important in a future military emergency. Question 4
In comparison to the GATT, the WTO has been more successful in completing rounds of
multilateral trade negotiations. Question 5
An increase in the country’s labour force will result in an increase in the quantity p roduced of the
labour-intensive good, with no change in the quantity produced of the other good. Question 6
Under the most-favoured treatment principle, member nations must treat other nations’
industries no less favourably than they do their own domestic industries, once foreign goods
have entered the domestic market. 1 Question 7
The dynamic benefits of the formation of customs unions are increased competition, stimulus to
investment, better utilization of economic resources, trade creation and trade diversion. Question 8
For a country, the larger the openness index, the lower the trade barriers the country imposes. Question 9
Current account deficits are bad, thus governments should encourage exports and restrict imports. Question 10
According to the overshooting model of exchange rate, a depreciation of the Australian dollar is
likely to be greater over a long time period than over a short time period. 2 PART B
Attempt ALL questions in this part. Each question is worth 4 marks. Question 11
Briefly describe the two justifications for the infant-industry argument for protection. Question 12
Explain the "brain drain" phenomenon. If you were economic advisor to the president of a
developing country, what policies would you recommend to resolve the problem of brain drain? Question 13
Explain why the law of one price and the absolute purchasing power parity normally do not hold in reality. Question 14
Assume Utopia currently prohibits any FDI into the country. Its government is considering
liberalizing this policy. Argue why Utopia should liberalize this policy. Question 15
Suppose the US currently imports one million pairs of shoes from China at $20 each. With a
50% tariff, the consumer price in the US is $30. The price of shoes in Mexico is $25. Suppose
that, as a result of NAFTA, the US imports 1.2 million pairs of shoes from Mexico and none from
China. With the help of a diagram, discuss the gains and losses to US consumers, US
producers, and the US government (assume that the US is a small country, i.e., it does not affect the world price). 3 PART C
Answer ONE out of two questions in this part. Each question is worth 20 marks. Question 16
a) There have been talks about using trade sanctions to enforce environmental standards. What
are the arguments to support this solution? Would you agree with these arguments?
b) A rise in national production and income per capita tends to improve air pollution, water
pollution, and sanitation. Comment on this statement.
c) Discuss the Prebisch-Singer hypothesis about the terms of trade in developing nations.
d) To industrialize its economy, a developing nation can choose either an export orientation
policy or an import substitution policy. Discuss the advantages and disadvantages of each policy. Question 17
a) Use a diagram of production possibility frontier and indifference curve to explain the immiserizing growth model.
b) Discuss why, even though increasing exports of less-skilled-labour-intensive manufactured
products are leading to rising employment and rising real wages for its workers, a developing
country still has interest in improving its educational system.
c) Government in industrial countries should use trade sanctions to enforce labor standards in
developing countries. Do you agree or disagree with statement? Explain.
d) Instead of using trade sanctions to enforce environmental and labour standards, three
alternative measures can be used are labels for exports, requiring home country standards and
increasing international negotiations. Examine the benefits and shortcomings of each measure. 4