Exam 21: International Trade and Finance

Exhibit 21-3  Potatoes and wheat output (tons per day) If each nation in Exhibit 21-3 specializes in producing the good for which it has a comparative advantage, then:

The demand curve for Japanese yen is downward sloping because when the exchange rate (measured in dollars per yen) falls,

Which of the following is a partially valid economic argument for restricting free trade?

A lawyer once said, "I could paint my house and fix my plumbing if I just had some technical training and good tools. But, I would rather hire a painter and a plumber." When it comes to fixing a leaking sink, the plumber:

Trade between nations A and B:

A country has a comparative advantage in producing a good when it has the lowest opportunity cost of producing that good.

Which of the following would be recorded in the U.S. goods export account?

Which of the following will most likely cause a nation's currency to appreciate on the foreign exchange market?

Exhibit 21-7  Foreign exchange market for U.S. dollars and British pounds Which of the following could cause the dollar-pound exchange rates to change as shown in Exhibit 21-7?

A tariff is a:

Exhibit 21-1  Production possibilities curves In Exhibit 21-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. If these two nations trade, Pada should specialize in the production of:

The term "balance of payments" refers to a nation's:

Which of the following changes in the exchange rate represents a depreciation of the dollar?

One reason for free trade restrictions is to protect infant domestic industries and thus allow them to compete in global markets.

The balance of payments ____.

Comparative advantage indicates that:

Who would benefit if the exchange rate with yen (in U.S. dollars) increased?

International specialization and trade according to the principle of comparative advantage is mutually beneficial for all economies involved.

A country should export the goods in which it has an absolute advantage.

If there is bilateral currency trade between Japan and the U.S., then as the supply of U.S. dollars on the world foreign exchange market ____, the price of a dollar in terms of Japanese yen will ____.