International Trade

Importing more than exporting is

• trade surplus
• trade deficit
• balance of trade
• balance of payment

What is a currency system in which each country tries to keep the value of its currency constant against one another called?

• fixed exchange rate
• flexible exchange rate
• floating currency exchange
• constant pricing

Suppose the exchange rate between the United States and Japan changes from $1 = 100 yen to $1 = 110 yen. What would happen to the prices of American goods in Japan?

• increase or decrease
• decrease
• remain the same
• increase

In the US Current Account, we usually operate with a 

• deficit
• surplus

Only producing certain goods instead of everything you need is known as

• importing
• specialization
• balance of trade
• absolute advantage

Floating exchange rates

• are set daily by the Fed
• are an established by an agreement of two nations
• values are determined by supply and demand
• are a result of bilateral agreements

Who are the main trading partners of the US?

• Germany, Great Britain, China, and France
• the Central American countries
• Canada, Mexico, and China
• the Middle Eastern countries

An agreement to eliminate trade barriers between Canada, Mexico, and USA. 

• WTO
• MFN
• USDA
• NAFTA

If the US dollar appreciates relative to the Canadian dollar, what is a likely outcome?

• trade surplus in US
• trade deficit in Canada
• trade deficit in both
• trade surplus in Canada

Which has more to do with opportunity cost?

• absolute advantage
• comparative advantage