Exam 21: International Trade and Finance

An increase in the value of the dollar in international exchange rate markets will cause the relative price of U.S.produced goods to foreigners to rise,the relative price of foreign produced goods to Americans to fall,causing U.S.exports to fall and U.S.imports to rise.

If U.S.buyers purchased $500 billion of foreign goods and foreign buyers purchased $400 billion of U.S.goods,the U.S.balance of trade would be:

Which of the following does not result in a change in the demand for foreign currency?

Suppose rice can be produced in country X at a lower cost than in country Y,while tuna can be produced in country Y at a lower cost than in country X.International competition will:

Protectionist policies such as tariffs and quotas are beneficial to the nation imposing those trade barriers.

A restriction on the quantity of a good that can be imported into a country is a(n):

If real interest rates in the United States are higher than those of our trading partners,what will tend to happen to the foreign exchange value of the dollar and the U.S.current account deficit or surplus?

Under a fixed exchange rate system,a government is at risk of running out of foreign currency reserves when the country's imports exceed its exports.

A country is said to have an absolute advantage in the production of a good when:

If one dollar exchanges for 20 Thailand baht,then:

The primary purpose of WTO is to:

A shift of the U.S.demand curve for Mexican pesos to the left and a decrease in the pesos price per dollar would likely result from:

Tariffs help consumers by lowering the price of imported goods.

Which of the following provides the foundation of the case for free trade?

If the current account and capital account are both in surplus,the official reserve account does not have to be in deficit.

Suppose Japan has a comparative advantage over Canada in the production of VCRs.This means that Japan:

Which of the following would cause the U.S.dollar to depreciate against the Japanese yen?

Specialization and trade allow an economy to expand its:

An increase in the price level in Japan relative to the price level in the United States will shift the demand curve for dollars leftward and the dollar depreciates or becomes weaker.

Which of the following transactions would be recorded as a credit in the U.S.current account?