Mgmt. Ch 4 International Trade

What would be one consequence of a prolonged decline in the value of the euro relative to the U.S. dollar?

• European exports to the United States would become less expensive.
• U.S. exports to Europe would become cheaper.
• European imports from the United States would increase.
• U.S. imports from Europe would become more expensive.U.S. imports from Europe would become more expensive.

What is one advantage of establishing trade barriers rather than allowing free trade?

• an increase in local regulations
• the improvement of foreign relations
• the protection of domestic industries
• a reduction in foreign product prices

How would inexpensive lumber from Canada affect the U.S. market for new homes?

• Prices of new homes would increase.
• Credit available for new homes would increase
• Prices of new homes would decrease
• Transaction costs for new homes would decrease.

What is the most likely effect of a U.S. import quota on foreign cars?

• The price of domestic cars would decrease because of improved production methods.
• Foreign automobile manufacturers would be allowed to sell more cars in the United States
• Domestic automobile manufacturers would sell more cars in markets in the United States
• The price of cars would increase in foreign countries because of the trade restrictions

A U.S. auto manufacturer plans to relocate plant operations to Mexico as a result of the North American Free Trade Agreement (NAFTA). Which criticism of free trade agreements would be based on this relocation?

• The demand for U.S. automobiles will decrease.
• The cost for producing U.S. automobiles will increase.
• U.S. automotive designers will have to create more efficient cars.
• U.S. automotive factory workers will have to compete with foreign workers.

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

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

What is an official ban on trade or other commercial activity with a particular country?

• Tariff
• Product standard
• Embargo
• Quota

In a command economy, who holds power over the economy?

• The people
• The government 
• Beyonce
• The traditions of your ancesetors 

In a market economy, if your mom dad are both teachers, do you have to be a teacher?

• NO
• Yes
• Maybe