International

The value of the Dollar appreciates versus the Euro. Who will benefit?

• no one benefits

• an American exporter

• an American traveling to Europe

• a French traveler to the United States

• a French importer of US goods

If the demand for British pounds increases,

In this situation you can conclude that 1 Euro would trade for

• 20 Mexican Pesos.

• 20 Mexican Pesos.

What conclusion can be drawn from this list?

• Georgia's sea ports need improvement.

• Georgia's agriculture is extremely profitable.

• Georgia is a good place for international businesses.

• Georgia has never been successful in international economics.

Why do free trade agreements increase globalized trade?

Free trade agreements significantly decrease transaction costs leading to a decrease in the cost of international goods and services.

• Free trade agreements allow countries to not pay any money for international goods and services.

• Free trade agreements significantly decrease transaction costs leading to a decrease in the cost of international goods and services.

• Free trade agreements prevent countries from purchasing international goods because the price of goods and services are produced cheaper domestically.

• Free trade agreements use the same currency so that countries do not have to pay transaction costs to exchange currency in the foreign exchange market.

How can an economic trade barrier, like an embargo, influence foreign policy?

• An embargo has no real affect on foreign policy.

• An embargo is considered an act of war in most cases.

In order to protect local food processors and production from competitively priced imports, Saudi Arabia institutes a maximum 40% charge on imported food. Currently, a 40% import duty rate applies to fresh, dried/processed dates and 25% on wheat flour. What kind of trade barrier is being described here?

• embargo

• quota

The Indian government requires a special import license for motorcycles and vehicles that is very restrictive. Import licenses for motorcycles are provided to only foreign nationals permanently residing in India, working in India for foreign firms that hold greater than 30% equity or to foreign nations working at embassies and foreign missions. This is BEST described as an example of

• a tariff

• an import quota

The European Union was created specifically for what purpose?

• to end hunger

• to encourage free trade

• to defend against terrorism

• to prevent another world war