CFA各科试题集及解答QUIZ 6.docx

CFA各科试题集及解答QUIZ 6.docx

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CFA各科试题集及解答QUIZ6

CFA各科试题集及解答--QUIZ6

六InvestmentTools:

Economics:

GlobalEconomicAnalysis

1.A:

GainingfromInternationalTradeQuestionID:

12842

Whichofthefollowingwilldeterminethepatternofinternationaltrade?

Comparativeadvantage.A.

Profitmarginadvantage.B.

Absoluteadvantage.C.

Lowesttotalcostadvantage.D.

A

Comparativeadvantageistheabilitytoproduceagoodataloweropportunitycostthanothers

canproduceit.

QuestionID:

12844

WhichofthestatementsaboutabsoluteadvantageisTRUE?

Absoluteadvantage:

referstothelowestopportunitycosttoproduceaproduct.A.

iswhenbothtradingpartnersbenefit.B.

iswhenanationtradesforgoodsforwhichtheyarethehigh-opportunityC.costproducer.

iswhenanationcanproducemoreoutputwiththesameresourcesthanD.anyothernation.

D

Bydefinition.

QuestionID:

12801

Whichtypeofadvantagedeterminesthepatternoftradeintheworld?

Absoluteadvantage.A.

Comparativeadvantage.B.

Advantagesduetotariffsandquotas.C.

Economicadvantage.D.

B

Comparativeadvantageistheabilitytoproduceagoodataloweropportunitycostthanothers

canproduceit.Accordingtothelawofcomparativeadvantage,tradingpartnersareboth

betteroffiftheyspecializeintheproductionofgoodsforwhichtheyarethelow-opportunity

costproducerandtradeforgoodsforwhichtheyarethehigh-opportunitycostproducer.

QuestionID:

12807

Thetablebelowoutlinesthepossibletradeoffsofproducingunitsofwineandwheatforboth

CountryAandCountryB.

CountryACountryB

winewheatwinewheat

0805

6units44units3

120100

Usingthetableabove,thelawofcomparativeadvantagesuggeststhat:

CountryAwouldnotgainfromtrade,becauseithasanabsoluteadvantageA.intheproductionofbothgoods.

neithercountrywouldgainfromtrade,evenifthecostsfortransportingtheB.productswerezero.

bothcountrieswouldgainifCountryAtradedwheatforCountryB'swine.C.

bothcountrieswouldgainifCountryAtradedwineforCountryB'swheat.D.

C

CountryAhasanabsoluteadvantageinbothwheatandwinebecauseitcanproducemoreof

boththancountryB.CountryBhasacomparativeadvantageinproducingwinebecauseitcan

produceeither5wheator10winewhichisaratioof1to2whereascountryAcanproduce8wheator12winewhichisaratioof1to1.5.BecauseofcountryB'scomparativeadvantageinproducingwinebothcountrieswouldbenefitifAuseditsabsoluteadvantageinproducingwheatinexchangeforB'scomparativeadvantageinwine.

QuestionID:

12805

Thelawofcomparativeadvantageexplainswhyanationwillbenefitfromtradewhenit:

exportsgoodsforwhichitisahigh-costproducer,whileimportingthoseforA.whichitisalow-costproducer.

exportsmorethanitimports.B.

importsmorethanitexports.C.

exportsgoodsforwhichitisalow-costproducer,whileimportingthoseforD.whenitisahigh-costproducer.

D

Comparativeadvantageistheabilitytoproduceagoodataloweropportunitycostthanotherscanproduceit.Whentradingpartnersspecilizeinproducingproductsforwhichtheyhaveacomparativeadvantage,costsareminimized,outputisgreater,andbothtradingpartnersbenefit.

QuestionID:

12856

Whichofthefollowingisleastlikelytoaffectexchangerates?

Differential:

spendingbyfirms.A.

inflationrates.B.

interestrates.C.

incomegrowth.D.

A

Themaindeterminantofexchangeratesisthesupplyanddemandforacurrency,whichisdeterminedbythedifferencebetweenthetwocountriesintheir:

incomegrowth,inflationrates,andinterestrates.

QuestionID:

24992

CountryAhasacomparativeadvantageintheproductionofProductF.Assumethecurrentworldpriceisgreaterthanthedomesticmarket-clearingprice.Iftheworldpriceisallowedtoprevailinthedomesticmarket,whichofthefollowingwithrespecttoProductFisTRUE?

Thequantitysuppliedislower.A.

Thequantitydemandedishigher.B.

Revenuesofproducersarelower.C.

Thequantitysuppliedishigher.D.

D

Atpricesabovethedomesticequilibriumprice,thedomesticquantitydemandedwillbelower,

andthequantitysuppliedwillbehigher.

QuestionID:

12855

Acountrypermitsfreeinternationaltrade,andtheworldmarketpriceforcornishigherthan

thedomesticpricewouldbeiftheeconomywereclosed.Whatisthelikelyimpactoftheopeneconomyonthepriceofcorninthedomesticmarketandquantityofcornsuppliedtothenon-domesticmarket?

PriceQuantity

A.lowerlower

PriceQuantity

B.lowerhigher

PriceQuantity

C.higherhigher

PriceQuantity

D.highlower

C

Thedirectimpactoftheopeneconomyonthepriceofcorninthedomesticmarketislikelytobeahigherpriceduetothegreatertotaldemandforthecorn.Thequantityofcornsuppliedtothenon-domesticmarketisalsolikelytobehigherbecausetheworldeconomyissupplying

corntothemarket.

QuestionID:

24994

WhichoftheitemsbelowisNOTareasonwhynationsadopttraderestrictions?

To:

protectindustriesthatarehighlysensitivetonationalsecurity.A.

prohibitforeignfirmsfromincreasingmarketsharebysellingproductsB.belowcost.

protectindustriesinwhichtheyhaveacomparativeadvantage.C.

protectindustrieswhiletheyaredeveloping.D.

C

Ifaparticularcountryenjoysacomparativeadvantageinaparticularindustry,noprotectionis

needed.

QuestionID:

12857

Whichofthefollowingargumentsfortraderestrictionshavelowerorquestionablevalidity?

TariffsareusedtoprohibitforeignfirmsfromsellingproductsinthecountryA.atbelowcostinanattempttogainmarketshare.

SomeindustriesarehighlysensitivetonationalsecurityandtheirproductsB.should,therefore,remaininthecountry.

InfantindustriesshouldbeprotectedforatimewhiletheydevelopandC.reducecosts.

Traderestrictionscreatedomesticjobs.D.

D

Thereadingstatesthatwhileallotherexplanationsarepartiallycorrect,"Traderestrictions

createdomesticjobs"isatbestofquestionablevalidity.

QuestionID:

24996

Theanti-dumpingargumentinfavoroftraderestrictionsistheargumenttherestrictions

shouldbeimposedto:

discourageforeignfirmsfromengaginginpricecompetition.A.

preventforeignfirmsfromdumpingunwantedproductsindomesticB.markets.

discourageforeignfirmsfromexportingproductsofinferiorquality.C.

preventforeignfirmsfromsellingtheirproductbelowcost.D.

D

Theanti-dumpingargumentisthatrestrictionsshouldbeusedtoprohibitforeignfirmsfrom

increasingmarketsharebysellingproductsbelowcost.QuestionID:

12861

Whoistheultimateloserwhentraderestrictionsareestablished?

Foreignproducers.A.

Foreigngovernments.B.

Domesticconsumers.C.

Domesticproducers.D.

C

Consumersloseduetothehigherpricesofgoods.

QuestionID:

12863

IftheU.S.autoproducerswereprohibitedfromexportingtheirproductsabroad,whichof

thefollowingwouldmostlikelyoccur?

AutopricesintheUSwouldrise.A.

TheincomesofUSautomakerswouldrise.B.

U.S.consumerswouldgainattheexpenseofforeignproducers.C.

AutopricesintheU.S.willfall,butU.S.citizenswouldhavelessforeignD.exchangewithwhichtopurchaseforeignassetsabroad.

D

IfU.S.autoproducerscouldnotexporttheirproductsabroadtheirpricewouldfallbecausedemandwouldbereduced.?

Withthedecreaseddemandandassociateddecreasedproductioninautosthiscouldhavearippleeffectthroughtheeconomyofoneormoreofthefollowing:

lessdollarsflowingintotheU.S.becauseofdecreasedexports,decreasedproductioninthelargeautoindustrycouldbeafactorleadingtoarecession,?

decreasingpriceswouldlimitsalariesforautoworkers.?

AllofthesefactorswouldinhibitthepurchaseofforeignproductsbyU.S.citizens.?

QuestionID:

12865

Whobenefitsfromaquota?

Thegovernment.A.

Foreignproducers.B.

Foreignconsumers.C.

Domesticproducers.D.

D

Quotasrestrictthesupplyofimportedgoods,whichincreasesthepricedomesticallybenefitingdomesticproducers.

QuestionID:

12866

WhichofthefollowingisNOTavalidreasonwhynationsadopttraderestrictions?

Nationsadopttraderestrictionsto:

protectnationaldefense.A.

preventfirmsfromsellingproductsinacountryatbelowcost.B.

protectinfantindustries.C.

protectjobs.D.

D

Inthelongrun,traderestrictionscannotprotectthenetnumberofjobsinacountry.Thenumberofjobsprotectedbyimportrestrictionswillbeoffsetbythenumberofjobslostintheimport/exportindustry.Import/exportfirmswillbeunabletoselltheoverpriceddomesticproductabroadorimportandsellthelowerpricedrestrictedforeign-madeproduct.

QuestionID:

24999

Whichofthefollowingreasonsforanationtoadopttraderestrictionsistheleastvalid?

The:

anti-dumpingargument.A.

nationaldefenseargument.B.

jobprotectionargument.C.

infantindustryargument.D.

C

Thenumberofjobsprotectedbyimportrestrictionswillbeoffsetbyjobslostintheintheimport/exportindustries.Inthelongrun,traderestrictionscannotprotectthenetnumberof

jobsinacountry.

QuestionID:

12867

"Importquotaswillcreatejobs,increasingtheemploymentlevelofanation."Economicanalysisindicatesthatthisstatementisinthe:

ShortRunLongRun

A.falsetrue

ShortRunLongRunB.

truefalse

ShortRunLongRun

C.truetrue

ShortRunLongRun

D.falsefalse

B

Theargumentthattraderestrictionsprotectjobsisofquestionablevalidity.First,traderestrictionspreventt