Exam 19: Comparative Advantage, International Trade, and Exchange Rates

From 1944 to 2001,the number of workers employed in manufacturing in the United States

Figure 19-10 -Refer to Figure 19-10.Suppose that the U.S.government deficit decreases,causing interest rates in the United States to fall relative to those in the European Union.Assuming all else remains constant,how would this be represented?

Assume that Bulgaria has a comparative advantage in producing sandals and Finland imports sandals from Bulgaria.We can conclude that

You're traveling in Ireland and are thinking about buying a new digital camera.You've decided you'd be willing to pay $125 for a new camera,but cameras in Ireland are all priced in euros.If the exchange rate is 0.85 euros per dollar,what's the highest price in euros you'd be willing to pay for a camera?

Figure 19-1 Figure 19-1 shows the U.S. demand and supply for leather footwear. -Refer to Figure 19-1.Suppose the government allows imports of leather footwear into the United States.What will be the quantity of imports?

Table 19-11 Output per hour Production and Production of work Consumption without Trade with Trade Clocks Hats Clocks Hats Clocks Hats Denmark 6 3 900 150 1,200 0 Belize 1 2 150 100 0 400 Denmark and Belize can produce both clocks and hats. Each country has a total of 200 available labor hours for the production of clocks and hats. Table 19-11 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-11.With trade,what is the total gain in hat production?

An increase in capital inflows will

A tax imposed by a government on imports of a good into a country is called

By 2016,the U.S.trade deficit with China

Figure 19-3 Since 1953 the United States has imposed a quota to limit the imports of peanuts. Figure 19-3 illustrates the impact of the quota. -Refer to Figure 19-3.Without the quota,the domestic price of peanuts equals the world price which is $2.00 per pound.What is the quantity of peanuts supplied by domestic producers in the absence of a quota?

Figure 19-10 -Refer to Figure 19-10.Suppose that the U.S.government deficit causes interest rates in the United States to rise relative to those in the European Union.Assuming all else remains constant,how would this be represented?

Table 19-12 Output per hour Production and Production of work Consumption without Trade with Trade Swords Belts Swords Belts Swords Belts Estonia 5 3 100 40 200 0 Morocco 2 2 60 60 0 120 Estonia and Morocco can produce both swords and belts. Each country has a total of 40 available labor hours for the production of swords and belts. Table 19-12 shows the output per hour of work, the production and consumption quantities without trade, and the production numbers with trade. -Refer to Table 19-12.All of the following are terms of trade that could possibly benefit both countries except

Citing excessive currency regulation under the nation's previous regime, Uzbekistan's recently elected president, Shavkat Mirziyoev, announced a 50 percent devaluation of the Central Asian nation's currency, the soum, in September 2017. The devaluation changed the official exchange rate from 4,210.35 soum per U.S. dollar to 8,100 soum per U.S. dollar, putting it in line with the black market exchange rate. Economic slowdowns and falling currency values in China, Russia, and Kazikstan, Uzbekistan's largest export markets, have hurt this nation's economy which depends on commodity exports and remittances. According to Oleg Kouzmin, an economist at Renaissance Capital in Moscow, "The decision … helps reduce extreme disparities between official and 'grey market' exchange rates that were witnessed in Uzbekistan in the previous years. Economists generally love to see devaluations -- one of the things than makes them different from politicians - devaluation always gives the country a chance for a fresh start." Source: Ksenia Galouchko "This Currency's Sudden 50% Devaluation May Attract Bargain Hunters," bloomberg.com, September 5, 2017. -Refer to the Article Summary.All else equal,a depreciation of the Uzbekistani soum relative to a currency such as the U.S.dollar should ________ the current account balance in Uzbekistan and therefore ________ the financial account balance in Uzbekistan.

How will an interest rate decrease in the United States affect equilibrium in the foreign exchange market?

Table 19-4 Berries Fish Rob 20 80 Bill 30 60 Rob Crusoe and Bill Friday spent their week-long vacation on a desert island where they had to find and prepare their own food. Rob and Bill spent one day each fishing and picking berries. The table lists the pounds of output Rob and Bill produced. -Refer to Table 19-4.Use the table above to select the statement that accurately interprets the data in the table.

Figure 19-10 -Refer to Figure 19-10.The appreciation of the euro is represented as a movement from

Table 19-8 Bows Arrows Ahmet 20 80 MyLinh 25 75 Table 19-8 shows the output per week for bows and arrows by Ahmet and MyLinh. -Refer to Table 19-8.Fill in the following table with the opportunity costs of producing bows and arrows for Ahmet and MyLinh. Bows Arrows Ahmet MyLinh

Is the value of U.S.exports typically larger or smaller than the value of U.S.imports?

Many economists criticize protectionism because it causes losses to consumers and eliminates jobs in domestic industries that use protected products.Why,then,do some people support protectionism?

Trade that is within a country or between countries is based on the principle of