International economics revision

The ability of one person or nation to produce more of a good than another person or nation

• Comparative Advantage

• Absolute advantage

• competitive advantage

• real advantage

An example of a Free trade area

• NAFTA

• EU

• ASEAN

• CARICOM

An agreement that will eliminate all tariffs and other trade barriers is an example of a

• Free Trade area

• common market

• customs union

• monetary union

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

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

• Country A makes all of the cars and trucks

• Country A should specialise in making cars and Country B should specialise in making trucks

• Country A should specialise in making trucks and Country B should specialise in making cars

• Country B makes all of the cars and trucks

Based on this table, which statement BEST describes the situation?

• Germany has an absolute advantage in both products, but Greece should still specialize in fish.

• Germany has an absolute advantage in motorcycles, and Greece has an absolute advantage in fish.

• Germany has an comparative advantage in motorcycles, but Greece has an absolute advantage in both products.

• In this particular case, neither side would benefit from specializing more in one of the particular products.

The Panamanian balboa (currency) always exchanges at a rate of 1 balboa = 1 US dollar. The balboa has a(n)

• floating exchange rate

• appreciating exchange rate

• depreciating exchange rate

• fixed exchange rate

A good that is sent to another country for sale

• export
• import
• quota
• subsidy 

An increase in the value of one currency in terms of another currency is a/n

• appreciation

• depreciation

• fixed exchange rate

• floating exchange rate

The measure of the price of one nation’s currency in terms of another nation’s currency is a/n

• appreciation

• depreciation

• exchange rate

• floating exchange rate