International Economics

Which of the following economic factors is MOST LIKELY to support free trade?

• the United Steelworkers of America

• Coca-Cola Corporation

• the Anti-Globalization Coalition

• US electronics producers

To say that net exports are negative is the same as saying that

• there is a capital account deficit.

• there is a budget deficit.

• the exchange rate has depreciated.

• there is a current account deficit.

The US and Canada have been experiencing a conflict over US restrictions on imported softwood lumber. Who would be MOST LIKELY to support the US restrictions?

• Canadian lumber firms

• US new home buyers

• US lumber importers

• US lumber firms

Many in the US are concerned about the depreciation of the US dollar. They would like to increase the value of the dollar. Which is the BEST argument for or against whether the value of the dollar should be increased?

• Yes, boosting the dollar will increase US exports

• Yes, boosting the dollar will decrease US imports

• No, boosting the dollar will anger foreign consumers and start a trade war

• No, boosting the dollar will increase US imports and decrease US exports

Japan claims that the snow in Japan is different from other places. Because of this, their laws prevent skis from being imported into the country unless they meet specific standards. This is called a

• tariff

• quota

• standard-based trade barrier

• non-trade-related restriction

Based on this table, if these two countries trade with each other, what should each country make?

• South Korea makes all of the TV sets and Japan makes all the cars

• South Korea makes all of the cars and Japan makes all of the TV sets

• South Korea makes all TV sets and Japan gives up 50 TV sets in favor of 25 cars.

• Japan makes all of the cars and South Korea shifts half of its car production to TVs

To plan for his business trip to Denmark, Tony needs to know how many Danish krones his US dollars are worth. Tony needs to be aware of

• the exchange rate.

• any currency embargoes.

• international tariffs.

• whether or not the US dollar currently enjoys a comparative advantage in trade.

Nations that are the target of embargoes are forced to deal with which of the following?

• falling prices

• lower tariffs

• increased scarcity

• more foreign competition

NAFTA BEST represents the controversy that exists over

• scarcity

• embargoes

• debt

• trade barriers

Floating exchange rates are determined by

• supply and demand

• the President of the United States

• the central bank

• the stock of gold reserves