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1. Growth of the scarce factor in the large-country case will, other things equal,

1. always expand trade and improve the terms of trade.
2. expand both exports and imports and lead to an improvement in the terms of trade.
3. result in a protrade production effect and a deterioration in the terms of trade.
4. result in an ultra-antitrade production effect and an improvement in the terms of trade.

2. If, when a country grows, its home production of its export good increases by 10 percent and its home consumption of its export good also increases by 10 percent, then, with the economic growth and with other things equal, the country’s absolute quantity of exports will __________.

1. increase
2. decrease
3. remain constant
4. increase, decrease, or remain constant - cannot be determined without more information.

3. If a country grows such that, at constant relative prices, the production of its export good rises by 5 percent and the production of its import-competing good rises by 15 percent (and these are the only two goods produced in the economy), this production pattern would be called __________ production effect.

1. a "neutral"
2. a "protrade"
3. an "antitrade"
4. an "ultra-antitrade"

4. In the new endogenous growth models

1. growth can occur due to "spillover" effects of research and development.
2. investment and growth are linked to acquisition of human capital.
3. growth does not necessarily converge to that of the growth rate of population.
4. all of the above