115年 - 115 外交特種考試_三等_外交領事人員類科英文組二：國際經濟（以英文命題及作答）#144545

1 To which of the following goods does the Theory of Purchasing Power Parity (PPP) apply? (A) A newly developed UV-resistant parasol. (B) The scenery along Taiwan’s north-south railway line. (C) An anniversary haircut service at the hair salon. (D) Cakes fresh out of the oven at 6:00 AM from the cake shop.

2 In the models of imperfect competition, the gains from free trade primarily stem from ________. (A) a reduction in factor costs (B) the disappearance of monopoly power (C) the shift from one-way to two-way trade (D) an expansion of output

3 What is the countervailing duty? (A) The government levies a tax on imported parts or raw materials and then subsidizes the export of the finished product by an amount equal to the tax previously collected. (B) The government imposes appropriate tariffs to balance the budget. (C) The government levies a tax on a specific imported good and simultaneously subsidizes the export of the same item by an equal amount. (D) A tariff imposed by the domestic government on subsidized goods because a foreign government has provided subsidies for their export.

4 According to the Theory of Purchasing Power Parity, if the domestic inflation rate is higher than the foreign inflation rate, then ________. (A) the domestic currency appreciates (B) exports increase (C) imports decrease (D) the domestic currency depreciates

5 Which of the following is referred to as a “dirty” exchange rate system? (A) Purely floating exchange rate system. (B) Fixed exchange rate system. (C) Managed floating exchange rate system. (D) Linked exchange rate system.

6 Which of the following can reduce the balance of payments deficit of a country? (A) Appreciation of the domestic currency. (B) Lowering import tariffs. (C) Restricting capital outflows. (D) Adopting expansionary monetary policy.

7 Assume that the government budget is in balance. If a country’s savings exceed its investment, resulting in excess savings, then the current account will show ________. (A) a surplus (B) a deficit (C) a balance (D) an indeterminate state

8 When citizens travel abroad and pay foreign currency for accommodation at hotels in other countries, this constitutes ________, from the perspective of their home country. (A) an export of services (B) an import of services (C) an export of goods (D) an import of goods

9 Based on the compilation methodology of the IMF’s Balance of Payments Manual, when Taiwanese firms remit funds to the foreign countries for investment, the impact on Taiwan’s balance of payments is ________. (A) an increase in current account expenditures (B) a decrease in current account expenditures (C) an increase in financial account expenditures (D) a decrease in financial account expenditures

10 If the United States raises import tariffs on goods from Taiwan, other things being equal, the value of the New Taiwan Dollar will ________. (A) appreciate (B) depreciate (C) remain unchanged (D) be uncertain

11 According to the Theory of Covered Interest Rate Parity, if the 6-month deposit interest rate for the New Taiwan Dollar (NTD) is 2% and the 6-month deposit interest rate for the US Dollar (USD) is 5%, the relationship between the USD spot exchange rate ( E ) and the forward exchange rate ( F ) is ________. (A)F > E (B)F < E (C)F = E (D) indeterminate

12 Which of the following would cause an increase in the supply of foreign exchange? (A) An increase in domestic investment abroad. (B) An increase in domestic spending on foreign travel. (C) An increase in domestic exports. (D) An increase in domestic imports.

13 If the exchange rate between the US Dollar and the New Taiwan Dollar changes from 30 to 25, then US goods will become ________. (A) cheaper in Taiwan (B) cheaper in the U.S. (C) more expensive in Taiwan (D) more expensive in the U.S.

14 According to the Offshoring Model, when all other factors are constant, which of the following outcomes is most consistent with the model’s prediction? (A) The relative wage of high-skilled workers, measured as the ratio of high-skilled to low-skilled wages, rises in both the home and host countries. (B) The relative wage of high-skilled workers rises in the home country but falls in the host country. (C) The relative wage of high-skilled workers falls in the home country but rises in the host country. (D) The relative wage of high-skilled workers falls in both the home and host countries.

15 That the U.S. significantly increases in import tariffs, other things being equal, will result in ________. (A) an appreciation in the US dollar (B) an increase in imports (C) a depreciation in the US dollar (D) an increase in domestic demand for foreign products

16 The commodity costs US$720 in the U.S. and €600 in Germany. Assume that absolute purchasing power parity holds. If the exchange rate is expressed as US dollars per euro, what should the equilibrium exchange rate be? (A) US$0.83 per euro. (B) US$1.00 per euro. (C) US$1.20 per euro. (D) US$1.32 per euro.

17 The current spot exchange rate is US$1.00 per euro, and the one-year forward exchange rate is US$1.05 per euro. Assume that both covered interest rate parity and uncovered interest rate parity hold. Which of the following statements is correct? (A) There is an expected 5% appreciation of the euros. (B) The market expects the spot exchange rate one year from now to remain at US$1.00 per euro because the spot exchange rate is unaffected by the forward market. (C) The euro is trading at a 5% forward discount; therefore, the US dollar is expected to depreciate by 5%. (D) The forward exchange rate reflects only the inflation-rate differential between the two countries and cannot reflect the expected future exchange rate.

18 An international concert promoter receives US$1 million in ticket revenue from overseas and needs to convert the funds into British pounds to pay venue rental fees. The finance manager observes the following three spot exchange rates:
US$1 = €0.8
€1 = £0.7
US$1 = £0.5
Assume that transactions can be conducted simultaneously in all three markets and that there are no transaction costs, bid–ask spreads, or quantity restrictions. Which of the following is correct? (A) There is no arbitrage opportunity. (B) The arbitrage profit is US$120,000. (C) The arbitrage profit is £50,000. (D) Whether a triangular arbitrage opportunity exists is not related to the British pound exchange rate.

19 Which of the following policies is most consistent with the predictions of the Gravity Model of trade? (A) Encouraging domestic firms to increase research and development spending in order to reduce average production costs. (B) Reducing cross-border transportation and transaction costs through regional economic integration. (C) Requiring all firms to export goods while prohibiting them from importing products in the same category. (D) Dividing the domestic market into more administrative regions in order to increase product variety.

20 If a large amount of “hot money” flows into Taiwan, what change will occur in the country’s balance of payments? (A) The current account balance decreases. (B) The current account balance increases. (C) The financial account balance decreases. (D) The financial account balance increases.

(一) Describe the definition of “terms of trade” and its common evaluation method.(8 points)

(二) Following the Ricardian model, Country A opens trade with Country B from an autarky economy. Explain how this opening affects the terms of trade of the two countries. (10 points)

(三) Suppose Country C is a large country. Explain how the importing tariff imposed by Country C affects its terms of trade. (7 points)

(一) Please utilize a Demand-Supply diagram of Y in Country A to show the effects of import on Country A’s production, consumption, and the price of commodity Y. (7 points)

(二) Please use the same diagram to show how the import affects Country A’s social welfare. (9 points)

(三) Suppose the government of Country A imposes an import tariff on commodity Y, explain how this policy affects Country A’s social welfare. (9 points)

三、The Balassa-Samuelson Model is an important model framework for determining real exchange rates. Please explain its core principle, and based on this model, explain how the real exchange rate is affected by the production side. (15 points)

四、Explain what stablecoins are and analyze their importance and advantages within the cryptocurrency market and cross-border payment systems. (10 points)