Economics MCQs

Page No. 167

An annual summary of country’s international economic and financial transactions is ?


a the capital accounts

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b the international balance of payments statements

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c the long-term current account

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dthe trade accounts

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I = S + F The equation above states that a country can increase its new capital formation (or investment) through is ?


aown domestic savings and by inflows of capital from abroad

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bstock market and fiscal policy

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csavings from abroad and financial outflow

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dsavings and financial liberalization

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Aid or official development assistance (ODA) includes ?


adevelopments grants

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b loans with at least 25 percent grant element

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ctechnical cooperation

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dAll of the above

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View Answer All of the above

Japan’s programs ?


aare understaffed politically muddled and administratively complex

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bare biased toward Asia

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cfocus on loans and the grant element of aid is low

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dAll of these

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View Answer All of these

Which of the following statement is NOT true about OECD aid ?


aDuring the 1980s OECD countries contributed four fifths of the world’s bilateral official development assistance to LDCs

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bIn the early 1990s the OECD contributed 98 percent of all aid

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cThe OECD aid increased from $6.9 billion in 1970 to $8.9 billion in 2001

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d In 2001, only Denmark Norway, Sweden, the Netherlands, and Luxembourg exceeded the aid target for LDCs

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Dani Rodrik points out that ?


aan economy more open to foreign trade and investment faces a more inelastic demand for unskilled workers

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bemployers and consumers can more readily replace domestic workers with foreign workers by investing abroad or buying imports

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cglobalization increases job insecurity

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d financial liberalization in LDCs leads to collapse of the economy

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An export subsidy should have the opposite effect of ?


aA government budget deficit

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bCapital flight

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cAn increase in Private saving

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dA tariff

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View Answer A tariff

Which of the following groups would not benefit from an EU imports quota on Japanese cars ?


a Eu consumers who buy electronics from Japan

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bEU farmers who export grain

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cemployees of EU car manufacturers

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d Shareholders of German carmaker BMW

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Which of the following statements about trade policy is true ?


aA country’s trade policy has no impact on the size of its trade balance

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bNone of these answers

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c A restrictive import quota decreases a country’s net exports

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dA restrictive imports quota increases a country’s net exports

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Suppose, due to political instability, Russians suddenly choose to invest in UK assets as opposed to Russian assets Which of the following statements is true regarding UK net foreign investment ?


aUK net foreign investment is unchanged because only UK residents can after UK net foreign investment

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bUK net foreign investment rises

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cUK net foreign investment falls

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dNone of the above

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