Econ
A strong dollar leads to....
A trade deficit
Under flexible exchange rates, trade deficits tend to correct themselves automatically through...
An index showing the relative strength of the dollar
Exchange rates among the currencies of the world change...
Constantly
Opportunity Cost
Cost of the next best alternative
What does a protective tariff seek to protect?
Domestic industries
Accurate statement?
Economists argue that cooperation in international economic affairs precedes political cooperation.
Best synonym for infant in the economic term infant industries argument?
Emerging
Whenever the dollar falls, exports tend to go down and imports tend to go up
False, exports up and imports down
The trade weighted value of the dollar is the price of one's country's currency in terms of another country's currency.
False, foreign exchange rate
Country has a trade surplus whenever the value of the products it imports exceeds the value of the products it exports.
False, trade surplus happens when exports exceeds value of imports
Free traders
Favor few or no trade restrictions
The opposite of a....exchange rate is a....exchange rate
Fixed, floating
What effect does a quota have on prices of comparable goods in domestic market?
Keeps prices from rising
Best describes trade between nations?
Mutually beneficial
Comparative advantage
Produce good more efficiently
Why do nations trade?
Specialize, believe products they receive are worth more than products they give up, need raw materials
Tariffs
Taxes on imported goods
Quotas
These are limits on trade
Absolute advantage is the basis for trade because it enables a country to produce enough of a good to consume domestically while leaving some for export.
This statement is what people used to think
Embargoes
Total ban on one or more products from a particular nation
Flexible exchange rates and floating exchange rates refer to the same thing: relying on supply and demand to determine the value of one currency in terms of another.
True
Foreign exchange refers to foreign currencies used by countries to conduct international trade
True
Most directly affected by an embargo established by United States?
U.S. exports
Most directly affected by NAFTA?
US Canada Mexico
Imports
goods and services brought into a nation from another nation
Exports
goods and services sold to other countries
Protectionists
people who argue for trade restrictions to protect domestic industries
absolute advantage
the ability to produce more of a given product using a given amount of resources