Exploring Imports, Exports, and Exchange Rates

The video discusses international trade, highlighting the US as a major importer and exporter. It explains trade deficits, comparative advantage, and the impact of trade on jobs, using NAFTA as an example. The video also covers exchange rates, currency dynamics, and the balance of payments, emphasizing the trade-offs and choices in international trade. It concludes by noting the overall positive impact of trade on global living standards.

Which country is the largest trading partner of the US?

• China

• Mexico

• Vietnam

• Canada

What is the term used to describe the annual difference between a country's exports and imports?

• Gross domestic product

• Net exports

• Trade balance

• Fiscal deficit

What is a trade deficit?

• When a country imports more than it exports

• When a country exports more than it imports

• When a country's savings rate is high

• When a country has no international trade

Why does the US import most of its clothing?

• Due to lower costs

• To support foreign economies

• Because of higher quality

• Lack of domestic production

What was a significant effect of NAFTA according to its proponents?

• Increased US trade deficits

• Decreased prices of consumer goods

• Increased protectionism

• Decreased manufacturing jobs

What is the main goal of the World Trade Organization (WTO)?

• To enforce strict protectionism

• To increase tariffs on imports

• To support only rich countries

• To promote free trade by reducing trade barriers

What happens when the dollar appreciates against another currency?

• US exports become cheaper

• Foreign imports become cheaper

• US imports become more expensive

• US exports become more expensive

What can cause a currency to appreciate?

• Decreased demand for the currency

• Increased supply of the currency

• Increased demand for the currency

• Stable political conditions only

What does the balance of payments record?

• All international transactions

• Only the country's imports

• Only the country's exports

• Domestic transactions only

Why might a country choose to run a trade deficit?

• To support domestic production only

• To consume more than it produces

• To increase its savings rate

• To decrease its exports