ECON 212 CH 14-16

California's total production is 750. Michigan's total production is 500.

A Michigan worker can produce 100 computer chips, but a worker in California can only produce 75. California allocates 10 workers to produce computer chips, while Michigan allocates only 5 workers. What is the total production for computer chips in each state?

A. Prevent large swings in the demand for its exports. B. Reduce uncertainty for businesses involved in international trade.

A country may try to fix its exchange rate in order to do which of the following? Select all that apply. A. Prevent large swings in the demand for its exports. B. Reduce uncertainty for businesses involved in international trade. C. Maintain an independent monetary policy.

Specialization

An individual, business, or country focusing on the production of a limited number of goods and services in order to attain a higher level of efficiency.

B. Increase.

Assume individuals can choose to place their savings in bank accounts in Paris (in euros) or in New York (in dollars). What will happen to the exchange rate (euros per dollar) if real interest rates on bank accounts in New York increase? The exchange rate, euros per dollar, will likely: A. Decrease. B. Increase. C. no change. D. one cannot tell.

B. The U.S. dollar will appreciate. C. The U.S. price level will rise. F. The Japanese price level will fall.

Suppose that the real exchange rate between the dollar and the yen is 0.7 (Japanese goods per U.S good). Purchasing power parity predicts which of the following? Select all that apply. A. The U.S. dollar will depreciate. B. The U.S. dollar will appreciate. C. The U.S. price level will rise. D. The U.S. price level will fall. E. The Japanese price level will rise. F. The Japanese price level will fall.

C. Prices in the U.S. will rise

Former President Trump blamed China's trade barriers as partially responsible for our trade deficit. Assume he is successful in getting China's trade barriers lowered. What is the likely effect in the U.S.? A. Full employment output will be raised B. Full employment output will be lowered C. Prices in the U.S. will rise D. U.S. imports will fall

increase

If the U.S. treasury bonds are considered a safe asset during times of global uncertainty, the demand for U.S. dollars will _________________ (increase, decrease, stay the same) when uncertainty rises elsewhere in the world.

A. England

If the countries start trading with each other, which country will specialize in and export cloth? ---------------England -- Portugal Cloth (yds) ------- 10 -------- 12 Wine (Bls) -------- 1 ---------- 6 A. England B. Portugal C. Cloth will not be produced.

$0.008=¥1

If the exchange rate between the Japanese yen and the U.S. dollar expressed in terms of yen per dollar is ¥125 = $1, what is the exchange rate when expressed in terms of dollars per yen?

Poland Cloth Poland Wine

Match the following goods with the country that possesses an absolute advantage in its production. -------------England -- Poland Cloth (yds) -----5 -------6 Wine (bls) -----0.5 ------3

U.S. Oranges U.S. Apples

Match the following goods with the country that possesses an absolute advantage in its production. -----Oranges --- Apples US --- 3-hrs ----- 2-hrs CA --- 6-hrs ----- 3-hrs

Portugal Cloth Portugal Wine

Match the following goods with the country that possesses an absolute advantage in its production.-------------- ---------------England -- Portugal Cloth (yds) ------- 10 -------- 12 Wine (Bls) -------- 1 ---------- 6

Tennessee Apples New York Oranges

Match the following goods with the state that possesses a comparative advantage in its production. -----Oranges -- Apples NY ------ 5 -------- 10 TN ------ 10 ------- 25

D. The price effect cannot be determined from this information.

Once again, assume that the quota is set at a level lower than the current level of imports. As a result of the quota, what will happen to the equilibrium price received by the producer in the imported Canadian softwood lumber market? A. The price will rise B. The price will fall C. The price will not change D. The price effect cannot be determined from this information.

Production possibilities frontier (PPF)

Plots the maximum output of goods and services that a country can produce with its resources.

U.S. goods have become more expensive since 2011. From 2012 until 2016 it mostly rose, took more units of other currencies. In most of 2017 it was about 10 percent below its recent peak in 2016, but by the end of 2018 and beginning of 2019 it was back at its 2016 peak.

Refer to Figure 16.2. From the point of view of U.S. trading partners, have U.S. goods become more expensive or less expensive since 2011?

depreciated

Referring to Figure 16.2, the U.S. dollar _______ (appreciated / depreciated) between 2002 and 2007?

Twin deficit

Refers to the connection between changes in the level of the federal budget deficit and the level of the trade deficit.

England Poland

Sort the following countries in the order indicating lowest and then highest opportunity cost of producing a yard of cloth. -------------England -- Poland Cloth (yds) -----5 -------6 Wine (bls) -----0.5 ------3

Euro has depreciated against the dollar because earlier to buy a good worth of $1 , €0.80 were needed. Now to buy a good worth of $1 , €0.85 are needed. Meaning more euros are required to buy the same good.

Suppose that the current exchange rate between the dollar and the euro is €0.80 = $1. If the exchange rate changes to €0.85 = $1, has the euro appreciated or depreciated against the dollar? Briefly explain.

A. rise

The creation of a quota on Canadian softwood lumber sold in the U.S. may affect prices and quantities of Canadian softwood lumber sold in the U.S. and the prices and quantities of American softwood lumber sold in the U.S. Assuming that the quota is set at a level lower than the current level of imports, the resulting equilibrium price paid by consumers in the imported Canadian softwood lumber market will ______________. A. rise B. fall C. not change D. may rise or fall

International demand for the dollar

The international demand for U.S. goods and services, for U.S. investments, and for U.S. financial assets.

Nominal rate (domestic price level/foreign price level) 1.12(104/100) = 1.16 This tell us that the prices of US goods and services are higher relative to UK goods and services. The US experiences inflation.

The nominal exchange rate of pounds per dollar is 1.12. Suppose the price in the US is 104 and the price level in the UK is 100. What is the real exchange rate?

Value of the dollar

The number of units of another country's currency it takes to buy one dollar on the international currency market.

Exchange rates

The price of one currency in terms of another.

Infant industry argument

The reason for temporarily protecting new industries because they do not yet have the economies of scale that their older foreign competitors enjoy.

D. All of the above are reasons why purchasing power parity does not hold.

Which of the following explains why purchasing power parity does not hold? A. Not all goods are traded. B. Shipping costs could explain differences in exchange rates. C. There may be import taxes or restrictions which alter prices. D. All of the above are reasons why purchasing power parity does not hold.

A. The government will likely gain more revenue with a tariff than with a quota.

Which of the following is true when comparing tariffs and quotas? A. The government will likely gain more revenue with a tariff than with a quota. B. A quota will be more effective in reducing imports. C. A tariff will increase the price of imports more than a quota will. D. Both quotas and tariffs on imports into the U.S. will eventually cause U.S. exports to rise.

C. Increased government spending.

Which of the following will likely cause the U.S. dollar to increase in value relative to other currencies? A. Higher taxes. B. Lower interest rates. C. Increased government spending. D. Higher U.S. prices.

Tennessee Apples Tennessee Orange

Which state possesses an absolute advantage in its production? -----Oranges -- Apples NY ------ 5 -------- 10 TN ------ 10 ------- 25

A. The rate at which countries' goods trade against each other. C. The nominal exchange rate times the ratio of the domestic price level to the foreign price level.

Which term best describes the real exchange rate? Select all that apply. A. The rate at which countries' goods trade against each other. B. The value of one currency in terms of how much it can buy of another currency. C. The nominal exchange rate times the ratio of the domestic price level to the foreign price level.

A. Consumers by paying a higher price for the imported shrimp. B. Restaurants because their inputs now cost more. C. Foreign producers of the imported shrimp.

Who is hurt by subjecting shrimps to tariffs? Select all that apply. A. Consumers by paying a higher price for the imported shrimp. B. Restaurants because their inputs now cost more. C. Foreign producers of the imported shrimp. D. U.S. shrimp fishermen.

The demand for exports from the United States lies behind the international demand for the dollar. Foreign citizens might want dollars to buy American wine, or more likely, American movies or American cars. Foreign businesses might demand dollars to buy American raw materials (which can also be U.S. exports) or to make investments in the United States, such as building a factory in Minnesota. Foreign banks and individuals might also want to buy financial assets.

Why do citizens outside of the US demand US dollars?

Trade lets countries obtain goods and services that they cannot efficiently produce for themselves. It also allows for specialization which means that countries are able to produce what is both most efficient and most beneficial.

Why do individuals, businesses and countries trade with one another?

If two countries want to specialize and trade even when both countries could produce all goods, then those countries may want to realize savings of producing those goods over time and develop economies of scale. This would lead to lower cost of production and possibilities of trading with many other countries that may not have this lowered cost of those goods.

Why might two countries want to specialize and trade even when both countries could produce all goods?

A. China; U.S

______________ has been known to fix its currency in the past, while ______________ maintains a flexible exchange rate. A. China; U.S. B. U.S.; European Union. C. European Union: China. D. U.S.; China.

A. The U.S. dollar will depreciate. D. The U.S. price level will fall. E. The Japanese price level will rise.

Suppose that the real exchange rate between the dollar and the yen is 1.5 (Japanese goods per U.S. good). Purchasing power parity predicts which of the following? Select all that apply. A. The U.S. dollar will depreciate. B. The U.S. dollar will appreciate. C. The U.S. price level will rise. D. The U.S. price level will fall. E. The Japanese price level will rise. F. The Japanese price level will fall.

A. It will increase.

Tastes for imported goods decrease. If nothing else changes, what will happen to the international value of the dollar? A. It will increase. B. It will decrease. C. It will not change. D. One cannot tell.

International supply of the dollar

The U.S. demand for imports into the U.S., U.S. demand for international financial assets, and U.S. demand for international investment.

Absolute advantage

The ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.

A. An increase in the value of the dollar because U.S. exports would increase.

A decrease in inflation in the U.S., combined with no change in inflation in the rest of the world, will cause which of the following changes in the international value of the dollar? A. An increase in the value of the dollar because U.S. exports would increase. B. A decrease in the value of the dollar because U.S. exports would increase. C. An increase in the value of the dollar because U.S. exports would decrease. D. A decrease in the value of the dollar because U.S. exports would decrease. E. No change in the value of the dollar because only changes in interest rates will cause changes in the value of the dollar.

Quota

A legal limit on the amount of a good or service that can be imported.

Voluntary export restraint (VER)

A limit imposed by the exporting country on the quantity of exports to a specified country during a given period of time.

B. imports; exports

A strong dollar increases ______________ and reduces ______________. A. exports; imports B. imports; exports C. imports; imports D. exports; exports

Antidumping tariff

A tariff or a duty imposed by the domestic government on imports that it believes are priced below market value or below the price charged in the exporting country's domestic market.

Tariff

A tax on an imported good.

Comparative advantage

An economy's ability to produce a particular good or service at a lower opportunity cost (that is, the one who gives up the fewest number of other goods) than its trading partners.

Purchasing power parity

An explanation of currency markets that says in the long run exchange rates will change to reflect differences in domestic prices. As a result, prices of goods around the world will be the same when measured in a single currency.

C. An increase in the value of the dollar because U.S. imports would decrease.

An increase in inflation in the rest of the world, combined with no change in inflation in the U.S., will cause which of the following changes in the international value of the dollar and why (focus on the effects on U.S. imports)? A. An increase in the value of the dollar because U.S. imports would increase. B. A decrease in the value of the dollar because U.S. imports would increase. C. An increase in the value of the dollar because U.S. imports would decrease. D. A decrease in the value of the dollar because U.S. imports would decrease. E. No change in the value of the dollar because only changes in interest rates will cause changes in the value of the dollar.

B. An increase in the value of the dollar and an increase in the equilibrium quantity.

An increase in the British demand for U.S.-produced products will have which of the following effects on the value of the dollar and the equilibrium quantity of dollars in the international exchange markets? A. An increase in the value of the dollar and a decrease in the equilibrium quantity of U.S. dollars in international markets. B. An increase in the value of the dollar and an increase in the equilibrium quantity. C. A decrease in the value of the dollar and an increase in the equilibrium quantity. D. A decrease in the value of the dollar and a decrease in the equilibrium quantity.

A. A surplus in the financial account due to a rise in demand for financial assets. C. A decline in the current account as the trade deficit widens.

An increase in the world's perception of the U.S. as a good, safe place to invest causes which of the following? Select all that apply. A. A surplus in the financial account due to a rise in demand for financial assets. B. A surplus in the current account due to a rise in demand for financial assets. C. A decline in the current account as the trade deficit widens. D. A surplus in the current account as the trade deficit narrows.

Trade-weighted value of the dollar

An index of the average foreign currency price of a U.S. dollar. That is, it is weighted by the relative importance of the buyers and sellers of U.S. dollars.

Comparative advantage

An individual can produce a good at a lower opportunity cost than another individual.

Absolute advantage

An individual can produce a good using fewer resources than another individual.

C. the same as; because demand has not changed.

Assume that instead of establishing a tariff, we set a quota on French computers exactly equal to the number of French computers that would be sold under a specific tariff. The resulting price of the French computers in the U.S. would be ______________ the price under the tariff, ______________. A. lower than; because no tax is involved. B. higher than; because the French manufacturers will get the increased revenue from the quota. C. the same as; because demand has not changed. D. cannot tell; because it depends upon what happens in the U.S. manufactured computer market.

$0.67

Assume the following data for Argentina: Wages $2.00 per hour Productivity DVDs produced per worker per hour = 3 Based on the wages and productivity figures for Argentina, what is the cost to make a DVD in Argentina? Remember to answer in dollars, to two decimal points. $_____.

$0.5

Assume the following data for the United States: Wages $10.00 per hour Productivity DVDs produced per worker per hour = 20 Based on the U.S. wages and productivity figures, what is the cost to make a DVD in the United States? answer in dollars, to two decimal points. $_____.

In some products, primarily agricultural products, geography plays an obviously important role. But some products are made more efficiently—that is, with fewer resources per unit of output—if the production facilities are larger.

Can you think of some reasons why economies of scale may arise?

A strong dollar may mean that confidence in the U.S. economy has increased. However, it also means that costs of goods produced other places are now lower for U.S. buyers. And costs of goods and services produced in the United States are more expensive for people abroad to buy.

Does a strong dollar offer any benefits to the United States?

Flexible exchange rates

Exchange rates that are determined in international currency markets.

Fixed exchange rates

Exchange rates that are set at a given level and government policy is aimed at maintaining that set level.

If country A's opportunity cost is less than country B's , country A should specialize where its opportunity cost is the smallest. Country A, by producing where the opportunity cost is the lowest, is giving up less than if Country B produced the good. Thus, the world gives up less by producing where opportunity cost is the lowest.

Explain how the concept of opportunity cost could be used to determine how countries specialize and trade.

The price of a substitute good has gone up. The demand for the domestic good increases. Prices of domestic goods rise, and more are produced. At current prices, producers will cut back production. Prices in the market will begin to rise, and quantities supplied will increase from the new, lower amount. Quantities demanded will decrease. We will end up in a new equilibrium where the price has increased, and the equilibrium quantity has decreased.

Give one reason why a country might decide to place a tariff or a quota on an imported good. What are the real costs to the country of doing so?

Increase Price of French computers sold in the U.S. Decrease Quantity of French computers sold in the U.S. Increase Price of U.S. computers sold in the U.S. Increase Quantity of U.S. computers sold in the U.S.

Given the creation of a U.S. tariff on computers manufactured in France, what would we expect to happen?

Non-tariff barrier

Government policy to restrict imports through methods other than a tariff or a quota.

The price of one currency in terms of another.

How is exchange rate defined?

The maximum production of automobiles would therefore be 10 autos and the maximum production of computer chips would be 750 chips.

If Michigan has 10 workers and each worker can produce either one automobile or 75 computer chips, which of the following is the most accurate depiction of Michigan's PPF?

If they went ahead and produced everything, the amount of money they would spend on resources to get these items out would be very high. Allowing others to contribute will give them an opportunity to focus on one specialized item using fewer resources, bringing in more revenue. With the additional revenue they can use it to outsource items and makes trades for needed items.

If a country is better than every other country at producing almost all of the goods it wants, why would it benefit from trade? Explain in your own words.

B. The nominal value of the dollar to depreciate. D. The nominal value of the euro to appreciate.

If investment opportunities improve in Europe relative to the U.S., what would we expect to happen? Select all that apply. A. A nominal appreciation in the dollar. B. The nominal value of the dollar to depreciate. C. A nominal depreciation of the euro. D. The nominal value of the euro to appreciate.

A. have an absolute advantage in the production of all goods.

If labor is the only input and all goods can be produced with fewer hours of work in the U.S. than in Thailand, then the U.S. will ___________. A. have an absolute advantage in the production of all goods. B. not necessarily have an absolute advantage in the production of all goods. C. have a comparative advantage in the production of all goods. D. have a comparative and an absolute advantage in the production of all goods.

B. It should produce the good in which it has a comparative advantage and let another state produce the good in which it has a comparative advantage.

If one state has an absolute advantage in the production of two goods, what should it do? A. It should produce both of the goods and allow the other state to produce a good in which it has an absolute advantage. B. It should produce the good in which it has a comparative advantage and let another state produce the good in which it has a comparative advantage. C. It should produce the good where its opportunity cost is the highest. D. It will use fewer resources in the production of one good and more resources in the production of the other.

C. 100 head.

If one worker can produce 100 head of cattle in California and one worker can produce 1,000 head of cattle in Nebraska, what would be the production of cattle in California? A. 10,000 head. B. 1,000 head. C. 100 head. D. Cattle will not be produced in California.

B. 1,000 head.

If one worker can produce 100 head of cattle in California and one worker can produce 1,000 head of cattle in Nebraska, what would be the production of cattle in Nebraska? A. 10,000 head. B. 1,000 head. C. 100 head. D. Cattle will not be produced in Nebraska.

The supply of the Thai baht would increase as Thai citizens and businesses demand U.S. financial assets. There would be a surplus of Thai baht. The Thai government would buy the surplus to prevent the value of the baht from falling. Eventually, with continued pressure, the Thai government would run out of other currencies, and the baht would have to fall in value.

If the Thai baht had been floating, what would have happened to its value during the Asian financial crisis? Use our supply and demand for currency model to explain. What would the Thai government have to do to maintain a fixed exchange rate? What may have caused it to ultimately fail to maintain a fixed exchange rate?

A. U.S. imports would increase and the value of the dollar would fall.

If the U.S. alone were to reduce tariffs on imported goods, how would imports and the value of the dollar be affected? A. U.S. imports would increase and the value of the dollar would fall. B. U.S. imports would increase and the value of the dollar would rise. C. U.S. imports would decrease and the value of the dollar would fall. D. U.S. imports would decrease and the value of the dollar would rise.

A. U.S. imports would increase, and the value of the dollar would fall.

If the U.S. alone were to reduce tariffs on imported goods, how would imports and the value of the dollar be affected? A. U.S. imports would increase, and the value of the dollar would fall. B. U.S. imports would increase, and the value of the dollar would rise. C. U.S. imports would decrease, and the value of the dollar would fall. D. U.S. imports would decrease, and the value of the dollar would rise.

B. More software and fewer computers.

If the U.S. has an absolute advantage in the production of software and computers when compared to Mexico, but has a comparative advantage in the production of software. After opening to trade the U.S. should produce: A. More software and more computers. B. More software and fewer computers. C. More computers and less software. D. One cannot tell unless we also know the opportunity costs for both countries.

A. It will increase.

If the international value of the dollar increases, what will happen to the U.S. trade deficit? A. It will increase. B. It will decrease. C. It will not change. D. One cannot tell.

A. $1000. Where the quantity supplied = the quantity demanded.

If there is no trade between the U.S. and Japan, what is the equilibrium price in the computer market in Japan? $/C - DU - SU - DJ - SJ $1k -- 90 -- 30 - 50 - 50 $2k --80 -- 35 - 40 - 55 $3k --70 -- 40 - 30 - 60 $4k --60 -- 45 - 20 - 65 $5k --50 -- 50 - 10 - 70 $6k --40 -- 55 - 0 -- 75 A. $1000 B. $2000 C. $3000 D. $4000 E. $5000

E. $5000 Where the quantity supplied = quantity demanded.

If there is no trade between the U.S. and Japan, what is the equilibrium price in the computer market in the U.S.? $/C - DU - SU - DJ - SJ $1k -- 90 -- 30 - 50 - 50 $2k --80 -- 35 - 40 - 55 $3k --70 -- 40 - 30 - 60 $4k --60 -- 45 - 20 - 65 $5k --50 -- 50 - 10 - 70 $6k --40 -- 55 - 0 -- 75 A. $1000 B. $2000 C. $3000 D. $4000 E. $5000

D. 50. Where the quantity supplied = the quantity demanded.

If there is no trade between the U.S. and Japan, what is the equilibrium quantity in the computer market in Japan? $/C - DU - SU - DJ - SJ $1k -- 90 -- 30 - 50 - 50 $2k --80 -- 35 - 40 - 55 $3k --70 -- 40 - 30 - 60 $4k --60 -- 45 - 20 - 65 $5k --50 -- 50 - 10 - 70 $6k --40 -- 55 - 0 -- 75 A. 10 B. 30 C. 40 D. 50 E. 75

D. 50. Where the quantity supplied = the quantity demanded.

If there is no trade between the U.S. and Japan, what is the equilibrium quantity in the computer market in the U.S.? $/C - DU - SU - DJ - SJ $1k -- 90 -- 30 - 50 - 50 $2k --80 -- 35 - 40 - 55 $3k --70 -- 40 - 30 - 60 $4k --60 -- 45 - 20 - 65 $5k --50 -- 50 - 10 - 70 $6k --40 -- 55 - 0 -- 75 A. 10 B. 20 C. 40 D. 50 E. 80

D. high, if productivity is higher in Mexico than in the U.S.

If wages are lower in Mexico than in the U.S., we would expect that U.S. imports from Mexico would be _________. A. high, because the costs of producing in Mexico are lower than in the U.S. B. high, if productivity is lower in Mexico than in the U.S. C. low, if productivity is higher in Mexico than in the U.S. D. high, if productivity is higher in Mexico than in the U.S.

We will end up in an equilibrium where the price has increased, and the equilibrium quantity has decreased. A new supply curve that increases the price at each quantity supplied is drawn. Or at current prices, producers will cut back production. Prices in the market will begin to rise and quantities supplied will increase from the new lower amount. Quantity demanded will decrease.

Imagine that the U.S. establishes a tariff on imported soccer uniforms. What will the new equilibrium in the market for soccer uniforms produced abroad most likely do?

Economies of scale

Long-run average total cost decreases as the quantity of output increases.

England 10 yards Poland 2 yards

Match the following countries with their respective opportunity cost ratios of producing a barrel of wine in terms of yards of cloth. --------------England -- Poland Cloth (yds) -----5 -------6 Wine (bls) -----0.5 ------3

Cloth England Wine Poland

Match the following goods with the country that possesses a comparative advantage in its production. -------------England -- Poland Cloth (yds) -----5 -------6 Wine (bls) -----0.5 ------3

U.S. Oranges. Canada. Apples.

Match the following goods with the country that possesses a comparative advantage in its production. -----Oranges --- Apples US --- 3-hrs ----- 2-hrs CA --- 6-hrs ----- 3-hrs

In international currency markets, the demand for U.S. dollars comes from the international demand for U.S. products, capital investments, and financial assets. It takes dollars, not euros or pesos, to buy those products and to make those investments. if U.S. individuals, businesses, and governments want to buy French goods and services, make investments in France, or buy French financial assets, they need euros to do so. For a U.S. citizen to get euros, they will have to supply dollars to the international currency market.

Think of a supply and demand model to describe a currency market. What would be bought and sold? What would be the price?

Large, diverse economies have less of a need for trade than do smaller, more specialized economies. There is less of a need for international trade because these economies can get a wide variety of goods from different parts of a very large and diverse country.

We have shown that all individuals and countries can gain from trade. Can you think of a reason why some individuals or countries may object to free trade?

B. The notion that a rising fiscal deficit causes interest rates to rise, increasing the trade deficit.

What are the twin deficits? A. The notion that a rising fiscal deficit causes interest rates to fall, increasing the trade deficit. B. The notion that a rising fiscal deficit causes interest rates to rise, increasing the trade deficit. C. The notion that a rising trade deficit causes interest rates to fall, increasing the fiscal deficit. D. The notion that a rising trade deficit causes interest rates to rise, increasing the trade deficit.

The demand for the domestic soccer uniforms increases. Prices of domestic goods rise and more are produced.

What does a new equilibrium for uniforms in the domestic market do when a tariff is established?

One individual can produce more of a specific product with the same resources than another individual would.

What does it mean to have an absolute advantage?

Analyze two individuals' opportunity costs of producing the same good. The individual with the lowest opportunity cost (that is, the one who gives up the fewest number of other goods) has the advantage in the production of that good.

What is comparative advantage?

The value of the dollar is the number of units of foreign currency it takes to buy one dollar.

What is meant by the phrase, "the value of a dollar"?

A. 1/2 of a bushel of oranges

What is the opportunity cost of growing one bushel of apples in Canada? -----Oranges --- Apples US --- 3-hrs ----- 2-hrs CA --- 6-hrs ----- 3-hrs A. 1/2 of a bushel of oranges B. 2/3 of a bushel of oranges C. 3/2 of a bushel of oranges D. 2 bushels of oranges

B. 2/3 of a bushel of oranges

What is the opportunity cost of growing one bushel of apples in the U.S.? -----Oranges --- Apples US --- 3-hrs ----- 2-hrs CA --- 6-hrs ----- 3-hrs A. 1/2 of a bushel of oranges B. 2/3 of a bushel of oranges C. 3/2 of a bushel of oranges D. 2 bushels of oranges

Dumping

When a country exports a product at a price that is lower in the foreign market than the price charged in the domestic market.

A decrease in US net exports is to be expected. Recession in the trading partners means there will be a decline of the demand for US exports. That being said the net exports in the United States will decline.

When foreign economies enter into recessions, what happens in the U.S. economy, to employment, inflation, and the stock market? Why?

B. Portugal

Which country has the highest opportunity cost for producing a yard of cloth? ---------------England -- Portugal Cloth (yds) ------- 10 -------- 12 Wine (Bls) -------- 1 ---------- 6 A. England B. Portugal

B. An improvement in investment opportunities in the U.S.

Which event would cause the dollar to appreciate against the Euro, assuming that everything else remains the same? A. An improvement in investment opportunities in Europe. B. An improvement in investment opportunities in the U.S. C. Increased inflation in the U.S. D. Higher interest rates in Europe.

A. An increase in interest rates in the U.S.

Which event would cause the dollar to appreciate against the euro, if everything else remains the same? A. An increase in interest rates in the U.S. B. An increase in interest rates in Europe. C. A decline in interest rates in the U.S. D. A decline in prices in Europe.

B. An increase in prices in the U.S.

Which event would cause the dollar to depreciate against the peso if everything else remains the same? A. An increase in prices in Mexico. B. An increase in prices in the U.S. C. Expansionary monetary policy in Mexico. D. An increase in interest rates in the U.S.

A. Buying domestic currency or selling foreign currency to assure a stable exchange rate. B. Buying and selling foreign government bonds to assure a stable exchange rate. C. Selling domestic currency or buying foreign currency to assure a stable exchange rate.

Which of the following enables a country to fix its currency to another currency? Select all that apply. A. Buying domestic currency or selling foreign currency to assure a stable exchange rate. B. Buying and selling foreign government bonds to assure a stable exchange rate. C. Selling domestic currency or buying foreign currency to assure a stable exchange rate.