Question : 11.3   Trade Liberalization Since 1985 1) The high correlation between rapid : 1303551

 

 

11.3   Trade Liberalization Since 1985

 

1) The high correlation between rapid growth in exports and rapid economic growth observed in several East Asia countries in recent decades

A) proves that export promoting trade policy leads to relatively rapid economic growth.

B) proves that a free-trade orientation of trade policy results in rapid economic growth.

C) proves that exports help growth, whereas imports impede growth.

D) proves that trade policy is the most important policy area for promotion of economic development.

E) does not prove that trade liberalization always leads to rapid economic growth.

 

 

2) The relatively rapid economic growth experienced by Chile in the late 1980s

A) supported the conventional Latin American reliance on import substitution.

B) relied on the Harris-Todaro model to explain this growth.

C) rejected the conventional Latin American reliance on import substitution.

D) demonstrated the importance of market failure as a reason for import substitution.

E) relied on high tariffs and import substitution.

 

3) To help developing countries expand their industrial base, some industrial countries have reduced tariffs on designated manufactured imports from developing countries below the levels applied to imports from industrial countries. This policy is called

A) export-led growth.

B) generalized system of preferences.

C) Most Favored Nation.

D) reciprocal trade agreement.

E) outsourcing.

 

 

4) To help developing nations strengthen their international competitiveness, many industrial nations have granted tariff reductions to developing nations under the

A) international commodity agreements program.

B) multilateral contract program.

C) generalized system of preferences program.

D) export led growth program.

E) import substitution policy.

 

 

5) Export-led growth tends to

A) discourage competition in the global economy.

B) exploit domestic comparative advantages.

C) lead to unemployment among domestic workers.

D) help firms benefit from diseconomies of large-scale production.

E) lower the overall volume of imports.

 

 

6) An efficient economy would set the marginal product in the traditional sector

A) lower than that in the modern non-traditional sector.

B) higher than that in the modern sophisticated sector.

C) equal to that in the modern sophisticated sector.

D) lower in the relatively capital intensive sector.

E) higher in the relatively capital intensive sector.

 

7) The experience of sub-Saharan Africa, as compared to that of “Other Asia” (not including the HPAEs) supports the argument that

A) high rates of protection tend to harm economic growth.

B) the poorer is the country the easier it is for it to “catch up” economically.

C) low rates of protection tend to promote economic growth.

D) free trade always best stimulates a developing country’s economy.

E) neither trade liberalization nor import substitution is a foolproof strategy for economic development.

 

 

8) The experience of Chile’s foreign sector in the last two decades of the 20th century supports the proposition that economic growth is supported by

A) import substitution.

B) industrialization policies.

C) trade liberalization policies.

D) intra-industry trading.

E) trade embargoes.

 

 

9) China’s recent experience supports the proposition that

A) “economic miracles” are solely to be expected in small countries.

B) central planning and socialism can promote sustained economic growth.

C) a lessening of income disparities is a prerequisite for economic growth.

D) growth in a large country cannot be affected by its foreign sector.

E) policy changed can dramatically prompt export oriented growth

 

 

10) The consensus today is that import-substitution protectionist industrial policy has not served the developing countries’ growth ambitions well. This fact proves that policies relying on export-driven growth are the “winning ticket” for these countries.