Unit 4 On Level

A weaker dollar has the direct benefit of which of the following?

• stimulating imports

• stimulating exports

• causing massive sell-offs

• causing lower taxes

Which of these choices is a likely effect of a weak U.S. dollar?

• Travel abroad becomes more affordable for Americans.

• U.S. imports rise dramatically and become more affordable.

• Europeans stop investing in American businesses.

• U.S. exports increase.

What might cause the value of the U.S. dollar to appreciate in relation to the Euro?

• Increased demand for European products in the U.S.

• Increased demand for U.S. products in Europe

• Increases in the U.S. money supply

• High rates of inflation in the U.S.

 Which of the following terms refers to the amount that currencies are worth, compared to one another?

• balance of trade

• currency value

• exchange rate

• free trade

Which factor tends to weaken the argument that trade barriers benefit a domestic economy by preserving more business opportunities for domestic firms?

• Reduced trade decreases the combined output of domestic firms.

• Reduced trade lowers competition among firms in domestic markets.

• Restricted trade reduces consumer demand for domestic firm output.

• Restricted trade makes it more difficult for domestic firms to do business abroad.

Why would a nation's government be MOST LIKELY to enact economic barriers to trade?

• to decrease the rate of inflation

• to reduce the government's debt payments

• to encourage foreign direct investment in the nation

• to protect domestic producers from foreign competition

A person who favors a protectionist trade policy would most likely:

• Call an end to quotas

• Support a reduction in tariffs

• Call for supporting national security and American jobs

• Claim that trade restrictions result in fewer choices and higher prices

The European Union has sought to benefit its member nations as a trading bloc by

• setting strict export quotas.

• subsidizing foreign industries.

• supporting a common currency.

• enforcing economic embargoes.

Which of the following does NOT reflect the aims and purposes of the Association of Southeast Asian Nations?

• to promote peace and stability in Southeast Asia

• to improve the standard of living in Southeast Asia

• to block trade agreements with non-member nations

• to accelerate economic development in Southeast Asia

What is the most important purpose of NAFTA?

• To increase trade barriers between US, Canada, and Mexico

• To reduce trade barriers between the US, Canada, and Mexico

• To help the Mexican economy with American and Canadian subsides

• Claim that trade restrictions result in fewer choices and higher prices