Exam 28: International Trade and Finance

Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then:

If nation A has a comparative advantage over nation B in the production of a product, this implies:

Exhibit 15-4 Coffee and tea output (pounds per hour) If specialization were carried out by each country in Exhibit 15-4 on the basis of comparative advantage, then:

Comparative advantage explains why a nation will benefit from trade when:

A tariff differs from a quota in that a tariff is:

Which of the following statements is true ?

If a box of Swiss chocolate priced at 100 francs can be purchased for $50, the exchange rate is:

Exhibit 15-1 Production possibilities curves In Exhibit 15-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. Suppose Nabia produces at point A on its PPC. How many units of wheat is the country able to produce?

Absolute advantage occurs when one nation can produce a good ____ its trading partners.

Which of the following is the best example of a quota?

An import quota on a product protects domestic industries by:

A nation benefits from international trade if it:

An appreciation of one's currency means that:

An appreciation in the U.S. dollar benefits which of the following groups of people?

The primary benefits derived from tariffs usually accrue to the:

Exhibit 15-1 Production possibilities curves In Exhibit 15-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. Suppose Pada produces at point B on its PPC. How much corn is the country able to produce?

Trade between nations A and B:

Which of the following would be expected if the tariff on foreign-produced shoes were decreased?

International trade has the potential to ____ the availability of goods and services to ____.

One big difference between tariffs and quotas is that tariffs: