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