Exam 18: International Economics

If the rate of inflation overseas rises relative to the rate of inflation in the United States, U.S.net exports will tend to ____, causing the exchange value of the U.S.dollar to ____.

Protectionist legislation is often passed because:

Critics of fixed exchange rates argue that fixed rates:

With flexible exchange rates, the imbalance between debits and credits arising from shifts in currency demand and/or supply is accommodated through special financial borrowings or reserve movements.

Suppose that the exchange rate between Japanese yen and U.S.dollars is originally 130 yen to the dollar.If it then changes to 150 yen to the dollar, exports of U.S.goods to Japan will tend to:

A decrease in tastes for European goods in the U.S.would ____ the demand for Euros, ____ the equilibrium price (exchange value) of Euros.

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

Say that Iceland can produce 32 units of food per person per year or 16 units of clothing per person per year, but Lavaland can produce 24 units of food per year or 12 units of clothing.Which of the following is true?

In foreign exchange markets, the demand for dollars is determined:

In Samoa the opportunity cost of producing 1 coconut is 4 pineapples, while in Guam the opportunity cost of producing 1 coconut is 5 pineapples.In this situation:

If the rate of inflation in the United States rises relative to the rate of inflation in foreign nations, U.S.net exports will tend to ____, causing the exchange value of the U.S.dollar to ____.

An increase in foreign demand for U.S.exports will ____ the demand for U.S.dollars and cause the U.S.dollar to ____ in value.

What benefits are to be gained from countries producing according to the law of comparative advantage? What if a country is absolutely more productive in all goods?

Critics of flexible exchange rates argue that flexible rates:

The United States is the world's leading grain-producing nation.Exporting grain causes the:

Figure 18-B -Refer to Figure 18-B.The change in producer surplus from free trade is equal to area:

If a Japanese pension fund decides to purchase U.S.government bonds, what is the effect in the exchange market?

Import quotas generate more government revenue than a tariff that is designed to allow the same level of imports.

How do subsidies distort trade patterns and lead to inefficiencies?

Figure 18-B -Refer to Figure 18-B.This country should: