MINISTRY OF EDUCATION AND TRAINING FINAL EXAM

NATIONAL ECONOMICS UNIVERSITY

INTERNATIONAL ECONOMICS
Mode of study: Full time Intake: 61
Exam place: Writing assignment and submit to LMS
School of Trade and International Economics Exam date: November 24, 2021
Department of International Economics
Allowed time: 90 minutes
Version 02

Question 1 (1 points): Indicate whether statement below is true (T) or false (F)
1. The mercantilists believed that when each nation specializes in the production of the
commodity of its absolute advantage and exchanges parts of its output for the commodity
of its absolute disadvantage, both nations end up consuming more of both commodities.
2. Direct investment are real investments in factories, capital goods, land and inventories
where both capital and management are involved and the investor retains control over use
of the invested capital.
3. The most important type of trade restriction is the tariff in the globalization.
4. The principal function of foreign exchange markets is the transfer of purchasing power
from on nation and currency to another.

Question 2 (3 points): What is meant by the exchange rate? How is the equilibrium exchange rate
determined under a flexible exchange rate system? Analyze the situation on the exchange
rate of Vietnam during the period of 2016 - 2020?

Question 3 (3 points): What are the effects of Free Trade Agreement Vietnam – European Union
(EVFTA) on trade in industrial and agricultural products with Vietnam?

Question 4 (3 points): Assume Dx identical to the demand of Commodity X for Nation 1 and Sx
identical to the supply of Commodity X for Nation 1.
Dx = 140 – 20Px
Sx = 20Px – 20
a. Calculate the level of consumption, production and imports of commodity X at the free trade price
of Px = 2USD
b. Calculate the level of consumption, production and imports of commodity X if Nation1 imposes
a 50% ad valorem import tariff of commodity X.
c. What are the consumption, production effects of the tariff and the deadweight loss?

Note: Open-book exam

BM KTQT