Unit 4 EPF

If a nation can produce more of a certain product than another country, that country

• has no advantage or disadvantage
• has an absolute advantage
• has a comparative advantage
• has a monopoly

The United States can produce 5 planes and 3 ships a day. Japan can produce 4 planes and 4 ships a day. Which country has an absolute advantage in the production of planes?

• Japan
• Both countries have the same advantage
• Neither country has an advantage
• United States

The United States can produce 5 computers and 1 radio a day. Japan can produce 4 computers and 4 radios a day. Which country has a comparative advantage in the production of radios?

• Both countries
• United States
• Japan
• Neither country

Which of the following would increase the U.S. trade surplus?

• German businesses purchase airplanes from American producers

• An increase in the value of the American dollar

• American firms purchasing computers from Japanese firms

• A decrease in Canadian tourism to the U.S.

Which of the following would increase the U.S. trade deficit?

• American businesses buying farming equipment in France

• a decrease in the value of the American dollar

• Canadian consumers purchasing cars made in America

• an increase in British tourism to the U.S,

Protecting domestic industries and jobs, spending money here at home, and protecting infant industries are all arguments in favor of

• outsourcing jobs to foreign countries
• protectionism

• NAFTA and the EU

• free trade

A limit on the number of goods that can be imported into a country is called a

• tariff
• embargo
• subsidy
• quota

Which of the following is an example of a tariff?

• The United States will not import goods from North Korea

• Germany will not allow more than 100,000- cars to be imported from Japan each year

• Russia adds a 30% tax to all televisions imported into the country

• France has banned all free trade with Cuba

When the U.S. dollar "falls" compared to the British pound, this means

• The value of the U.S. dollar remains the same in relation to the British pound.
• The value of the U.S. dollar increases in relation to the British pound.
• The British pound is no longer accepted as a currency in the U.S.
• It takes more U.S. dollars to equal one British pound

The value of the U.S. Dollar appreciates versus the Mexican peso. Who will benefit?

• No one benefits

• An American producer who exports to Mexico

• A Mexican tourist traveling in the U.S.

• An American tourist traveling in Mexico