FAC3702 Assignment 1 (COMPLETE ANSWERS) Semester 1 2025 (143408) - DUE 20
March 2025
International trade theory refers to... - ANSWER i) the microeconomic aspects of international trade
ii) the macroeconomic aspects of international trade
iii) open economy macroeconomics
An improvement in a nation's terms of trade means that... - ANSWER The prices of its exports have
increased more than the prices of its imports.
According to the mercantilists, trade was considered a... - ANSWER Zero-sum game
The mercantilists believed that a country's economic welfare depends on... - ANSWER Achieving a
favourable trade balance
Which of the following policies did the mercantilists advocate to achieve their objective? - ANSWER
Imposing tariffs, quotes, and other trade barriers
According to the law of comparative advantage, a country should specialise in producing a good or
service in which it has a comparative advantage. Comparative advantage is determined by... - ANSWER
Opportunity cost of production
March 2025
International trade theory refers to... - ANSWER i) the microeconomic aspects of international trade
ii) the macroeconomic aspects of international trade
iii) open economy macroeconomics
An improvement in a nation's terms of trade means that... - ANSWER The prices of its exports have
increased more than the prices of its imports.
According to the mercantilists, trade was considered a... - ANSWER Zero-sum game
The mercantilists believed that a country's economic welfare depends on... - ANSWER Achieving a
favourable trade balance
Which of the following policies did the mercantilists advocate to achieve their objective? - ANSWER
Imposing tariffs, quotes, and other trade barriers
According to the law of comparative advantage, a country should specialise in producing a good or
service in which it has a comparative advantage. Comparative advantage is determined by... - ANSWER
Opportunity cost of production
