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