Currency exchange rate directly affects the profitability of firms producing for the international

market.  As such, currency exchange rate is by far the most important factor in deciding trade
policy. Which of the following statements holds? The first and second statements are true.

Which theory/theorem talks about oligopoly and monopoly? Theory of imperfect competition

Which theory establishes a linkage between economic efficiency, factor endowments, and the
direction of international trade? Hecker-Ohline-Samuelson(HOS) theorem

It refers to the percentage at which the value-added of a product at a particular stage of

processing in a domestic industry exceeds its true value when there is no protection. Protective
rates of protection

What happens to the demand for foreign currency as the demand for imports decreases?
Decreases

Which of the following is true about the evolution of trade? Trade is likely to occur between rich
countries that have similar factor endowments and relative prices structure.

What happens to the demand for foreign currency as the demand for imports decreases?
Decreases

The Foreign Trade Agreement (FTA) are trade agreements that include preferential tariffs for
products that are produced in the countries that meet country of origin rules.  Among these
FTAs is the NAFTA.  What does NAFTA stand for?  North America Free Trade Association

Which theory asserts that the direction of intra-industry trade is determined largely by the
differences in relative factor endowments, while production differentiation and relative market
size determine the volume and composition of international trade? Theory of imperfect
competition

Which theory/theorem states that countries will specialize and trade in goods which are
relatively abundant in their territory? Heckscher–Ohlin-Samuelson(HOS) theorem

High-performing Asian economies (HPAEs) refer to the following countries, except Philippines

There has been a shift in the commodity composition of international trade where exports
moved from light manufacturing to heavy manufacturing.  Among the light products are textile,
paper, and wood, while heavy products consist of telecommunications equipment. Which of the
following statements holds?  Both statements are true.

Increased productivity from manufactured exports is a key issue in international trade. How is
this increased productivity achieved? By utilizing the best practices of world technology

Which of the following best characterizes Stage 5 of the product cycle theory?  Reduction of
protection by the government

Which of the following are gains from international trade? Consumption and production gains

What could be the reason for the increase in share of intra-Asian trade in the total Asian trade?
There has been a rapid growth of regional cooperation arrangements that have facilitated trade.
Mongolia belongs to East-Asia. True
When the demand for dollar currency increases, the dollars currency appreciates. True
Lao PDR is not included in Mekong countries. False
As the demand for imports increases demand for foreign currency decreases. False
Theory of imperfect competition asserts that the direction of intra-industry trade is
determined largely by the differences in relative factor endowments, while production
differentiation and relative market size determine the volume and composition of
international trade. True
Ricardian Theory considers the units of labor or labor hours required to produce a unit of
a  commodity. True
Heckscher–Ohlin-Samuelson (HOS) theorem states that countries will specialize and
trade in goods which are relatively abundant in their territory. True
Theory of imperfect competition talks about oligopoly and monopoly. True
Ricardian Theory states that labor-rich countries will specialize in the production of
labor-intensive  products while countries with abundant capital relative to labor will
specialize and trade in commodities that are capital-intensive in nature. False