International Trade & Currency Module 7 Test
If the Japanese yen appreciates from one cent to two cents per yen, the dollar depreciates from _____ to _____ yen per dollar.
100; 50
If the dollar appreciates relative to the British pound,
NOT British dishes will become more expensive in the United States
An embargo is sometimes used to achieve a country's foreign policy goals. An embargo is an example of
NOT an economic alliance.
How could a national economy achieve a favorable balance of trade?
NOT importing goods equal in value to its exports
Which of these BEST defines the term balance of trade?
NOT the difference between the yearly value of a country's exports and the yearly value of goods it produces
Why did the United States government most likely sign NAFTA?
NOT to establish a military alliance
Which of the following results when federal government expenditures are less than the federal government's total receipts?
a federal budget surplus
The United States stops trading with a country because of reported evidence that the government of that country mistreats its citizens. Which foreign policy tool is the United States government using in this situation?
economic sanction
Ecuador has an ideal climate for growing bananas, whereas the United States would have a difficult time growing them. In order to help US consumers of bananas, the US would likely
eliminate the tariff on bananas imported from Ecuador
What economic concept is evident when a student wears a shirt made in Malaysia, drives a car made in Germany, and eats fruit produced in Mexico?
global interdependence
Which of the following is the best example of a trade barrier?
high tariffs
Which of these is NOT an example of international trade?
the US buying pineapples from Hawaii
When the value of the British pound changes from $1.25 to $1.50, then
the pound has appreciated and the dollar has depreciated
The exchange rate is
the price of one currency relative to another
What is the purpose of NAFTA?
to eliminate most tariffs among member nations
What is the main reason the US imposes tariffs on imports?
to protect American producers
What is the purpose of this action by the United States?
to protect the United States lumber industry
Economic cooperation among nations occurs when nations
trade with each other
If the dollar depreciates relative to the Swiss franc
Swiss chocolate will become cheaper in the United States
Which of the following trading blocs does not have any internal barriers regulating the flow of workers, financial capital, or goods and services?
The European Union
Why would the U.S. import bananas from Ecuador instead of growing them in the U.S.?
US can import bananas for less than it would cost to produce them
What organization replaced GATT (General Agreement on Tariffs and Trade)?
WTO
Which of these is usually a result of free trade between countries?
more markets for goods
When a country's currency appreciates (rises in value relative to other currencies), the country's goods abroad become _____ expensive and foreign goods in that country become _____ expensive (holding domestic prices constant in the two countries).
more; less
A particular country has rich petroleum resources, but not enough agricultural land. One of the ways in which a country can supply its need for agricultural products is by entering into a trade agreement with a country that
needs petroleum products.
If Congress raised the tariff on athletic shoes imported to the United States, which of the following statements would be true?
people who purchase athletic shoes would pay more for them
