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Wooclap Questions Before Mid-Term

1. Which wave of globalization does this picture represent?

a. First
b. Second
c. Third
d. None of them

2. Singapore did not participate in which wave of globalization?

a. First
b. Second
c. Third
d. None of them
3. Sorting the countries below by the time each country first participated in globalization
a. The United States
b. Singapore
c. China
d. Central African Republic

4. Consider the table of labor productivities above. With what value of X will Malaysia have
absolute advantage in producing coconut?
a. X>20
b. X<20
c. X>10
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d. 10<X<20

5. Consider the table of labor productivities above. With what value X will Malaysia have
comparative advantage in producing coconut?
a. X<10
b. X<20
c. X<30
d. X<40

6. (Knife-edge case) Consider the table of labor productivities above. With what value of X will
there be no comparative advantage for either country?
a. X=10
b. X=20
c. X=40
d. Not possible

7. Assume there are two countries and five products. Country A has absolute advantage in
product 1,2, and 3. Country B has absolute advantage in product 4 and 5. The principle of
comparative advantage tells us that Country A will export product 1, 2, and 3 (ignoring the
knife-edge case).
a. True
b. False

8. Assume there are two countries and five products. Country A has absolute advantage in
product 1,2, and 3. Country B has absolute advantage in product 4 and 5. The principle of
comparative advantage tells us that Country A cannot have comparative advantage in both
product 4 and 5 (ignoring the knife-edge case).
a. True
b. False

9. Assume there are two countries and five products. Country A has absolute advantage in
product 1,2, and 3. Country B has absolute advantage in product 4 and 5. The principle of
comparative advantage tells us that if country A has comparative advantage in product 1
only, then the opportunity cost of producing product 1 is less than that of product 2 and 3
(ignoring knife-edge case).
a. True
b. False

10. Which of the following statements about capital (in economics) is false?
a. Some forms of capital require investment
b. Capital may be consumed to provide utility
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c. Knowledge is a form of capital

d. Labor and capital are the two major factors of production

11. Which of the following is a determinant of comparative advantage?

a. Economies of scale
b. Geographic location
c. Domestic regulations
d. All of above

12. Which of the following statements about the China shock is correct?
a. Researches on China Shock tell us that trade is not mutually beneficial
b. Researches on China Shock tell us that the U.S. will be better off in autarky
c. Researches on China Shock tell us that the U.S. will be better off by not trading with
China
d. Researches on China Shock tell us that trade can hurt the welfare of workers in
import-competing sectors

13. Still using the Singapore-Malaysia example discussed in class, which of the following
statement is true?
a. Singapore is relatively abundant in capital because it has more machines than
Malaysia.
b. Singapore is relatively abundant in labor because it has more workers than
machines.
c. Singapore is relatively abundant in capital because its capital/labor ratio is higher
than Malaysia's.
d. Malaysia is relatively abundant in labor because it has more workers than China.

14. Still using the Singapore-Malaysia example discussed in class, which of the following
statement is true?
a. Factor-Price Equalization implies that price of electronics in Singapore will converge
to price of electronics in Malaysia
b. Factor-Price Equalization implies that price of electronics in Singapore will converge
to price of palm oil in Malaysia
c. Factor-Price Equalization implies that cost of labor in Singapore will converge to cost
of capital in Singapore
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d. Factor-Price Equalization implies that cost of labor in Singapore will converge to cost
of labor in Malaysia

15. The Stolper-Samuelson Theorem tells us

a. Free trade will benefit everyone regardless of factor endowed
b. Some people will suffer losses from free trade even though the country will enjoy
overall gain
c. People suffering losses from free trade are always owners of capital
d. People suffering losses from free trade are always owners of labor

16. Which of the following products' origin should be Singapore?

a. Toys made in China unloaded in Singapore and reloaded on a different ship
b. Boeing 787 airplane assembled in Seattle, US and handed over to Singapore Airlines
c. Crude oil shipped from Saudi Arabia to Singapore and refined to petroleum
d. Singapore's Temasek Holdings invested a factory in Vietnam that produces T shirts

17. Which of the following statement about tariffs is correct?

a. Ad valorem tariffs are relatively easy to apply and administer
b. Tariff is always applied to a product’s value as it leaves the exporting country
c. Tariff cannot be used to improve welfare
d. Degree of protection of specific tariffs vary inversely with changes in import prices

18. Product standards

a. Can affect marginal cost of production
b. Can affect fixed cost of production
c. Can affect both marginal and fixed cost of production
d. None of the above is true

19. Consider the scenario shown in the figure. Which of the following statements is false?
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a. The difference between domestic demand and domestic supply is import demand
b. Foreign supply curve is flat because home country is small
c. When domestic demand curve shifts to the right, import demand also shifts to the
right
d. It is possible to use tariff to improve domestic welfare

20. Consider the scenario shown in the figure. Which of the following statements is correct?

a. This is the case in which imposing tariff does not increase domestic supply and it is
not possible to use tariffs to improve domestic welfare.
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b. This is the case in which tariff does not generate any revenue and it is not possible
to use tariffs to improve domestic welfare.
c. It is possible to use tariffs to improve domestic welfare because the import demand
curve is downward sloping.
d. It is possible to use tariffs to improve domestic welfare because the foreign supply
curve is upward sloping.

21. Which of the following has been WTO’s most powerful weapon in dealing with non-tariff
barriers?
a. National treatment
b. TBT Agreement
c. SPS Agreement
d. International standards

22. Which of the following round of WTO negotiation is unsuccessful?

a. Kennedy Round
b. Uruguay Round
c. Doha Round
d. Tokyo Round

23. Which of the following statements about WTO's regulation on tariffs is false?
a. WTO allows anti-dumping duties
b. WTO allows countervailing duties
c. WTO allows applied tariffs to be lower than MFN tariffs
d. WTO allows applied tariffs to be higher than bound tariffs

24. Which of the following statements about bound tariffs is correct?

a. Imposing bound tariff rates is a violation of MFN.
b. Imposing bound tariff rates is a violation of National Treatment.
c. The rounds of negotiations led by GATT/WTO before the Doha Round successfully
reduced bound tariff rates.
d. The rounds of negotiations led by GATT/WTO before the Doha Round did not reduce
bound tariff rates.

25. The U.S. - China trade war

a. benefits the U.S. because the U.S. heavily relies on tariff as a source of government
revenue.
b. benefits the U.S. because Chinese exporters reduced producer prices, resulting in
little effect on U.S. consumer prices.
c. benefits Chinese exporters serving the U.S. market.
d. successfully reduces U.S. trade deficit with China.
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26. Which of the following cities is a center of Hi-Tech firms in China?

a. Beijng
b. Suzhou
c. Guangzhou
d. Shenzhen

27. Which of the following statements about China's economic activities during Mao's Era is the
most accurate one?
a. China enjoyed rapid GDP per capita growth
b. International trade contributed substantially to the country's growth
c. State-owned enterprises employed a large share of urban workers
d. China actively attracted foreign direct investment

28. Which political leader in China started the Reform and Opening-Up Era?
a. MAO Zedong
b. DENG Xiaoping
c. WANG Yang
d. XI Jinping

29. Which of the following is a feature of India before the economic reform in 1991?
a. License Raj
b. Import substitution
c. Inefficient public sector
d. All of above

30. The manufacturing sector in India has contributed most to the country's rapid economic
growth after the reform.
a. True
b. False

31. The U.S. and India have not experienced substantial tensions in trade (as compared to U.S.-
China trade war) because India is more liberalized than China.
a. True
b. False

32. In 2020, the contraction in GDP as a result of the global pandemic has been much stronger
while the fall in merchandise trade has been more moderate.
a. True
b. False

33. The COVID pandemic has observed rising protectionism as more countries increase tariffs on
PPE.
a. True
b. False

34. Which of the following should be recorded as a credit in Singapore's current account?
a. Singaporeans taking Japan Airlines from Tokyo to Singapore
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b. Singaporean government donating to Indonesia after the tsunami

c. Singaporean earning income as a banker in Malaysia
d. Singaporean firm importing chocolates from Belgium

35. Which of the following should be recorded as a debit in Singapore's capital account?
a. Singaporean investors buy stocks of US firms
b. A Japanese firm builds a factory in Singapore
c. Temasek Holdings sells one of its factories in China to Chinese investors
d. DBS receiving loan payments from an Indonesian firm

36. Which of the following situation will lead to an appreciation of SGD?

a. Quantitative easing (printing more money) by US federal reserve
b. Smaller inflation in Singapore
c. Drastic increase in demand for Singaporean fish skins from China
d. All of above

37. You see the following exchange rates shown in the figure at a money changer in Singapore.
Which of the following is true?
a. You can use 1 SGD to exchange for 17,000 VND.
b. You can use 1 SGD to exchange for 17,152 VND.
c. You can use 17,000 VND to exchange for 1 SGD.
d. You can only use VND to exchange for SGD, but not vice versa.

38. Which of the following is not in the basket of currencies that determines the value of special
drawing rights?
a. USD
b. CNY
c. GBP
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d. SGD

39. Which of the following statements about IMF is true?

a. Was established after the Bretton Woods Conference
b. Its president is always a US citizen
c. The main goal of IMF is to reduce poverty
d. All of above

40. The Washington Consensus

a. refers to a set of economic policies related to the gold standard
b. includes policies that have been required by IMF before releasing rescue packages to
countries in crisis
c. is supported by the developing countries after the financial crisis in 2008
d. explains the economic downturns observed in Argentina

41. Which of the following statements about government bonds is correct?

a. There is no default risk associated with government bonds.
b. All government bonds have very good credit ratings.
c. It is possible for government bonds to default but the consequences are mild.
d. The interest rate of government bonds can change after issuance.

42. Which of the following country was not severely affected by the Asian Financial Crisis?
a. China
b. South Korea
c. Indonesia
d. Thailand