Transcript Japan will trade electronic equipment for goods in other

Japan will trade electronic equipment
for goods in other countries as long as
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Japan’s balance of
payments is in positive
territory.
Other countries have
absolute advantage in
electronic equipment.
Japan has comparative
advantage in electronic
equipment.
Other countries have more
desirable exchange rates.
Ja
1.
Which group is MOST LIKELY to benefit if
the US Dollar appreciates against the Yen?
1.
2.
3.
4.
Japanese business with
contracts to buy US goods
United States banks holding
Japanese currency
United States investors
buying Japanese stock
Tourists traveling from
Japan to the United States
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Which group benefits the most
when the US Dollar depreciates?
1.
2.
3.
4.
Foreign governments that
hold US Treasury bonds
Citizens from other countries
traveling to the United
States
Business in the US that
must repay loans to banks in
other countries
US citizens traveling in other
countries
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Why do domestic producers of a good
benefit from trade barriers like embargos or
quotas?
1.
2.
3.
4.
The number of goods
imported is lower
They decrease the desire for
other countries’ goods
Domestic producers get
money from the government
They tax the foreign
completion
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Balance of trade differs from balance of
payments in that balance of trade
1.
2.
3.
4.
Is not used when
calculating GDP
Measures only purely
financial transactions
Is calculated by the Fed
Measures only exports
minus imports
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What is MOST LIKELY to happen if the
dollar becomes stronger relative to other
currencies?
1.
2.
3.
4.
Both imports and
exports will decrease
Both imports and
exports will increase
Imports will decrease,
exports will increase
Imports will increase,
exports will decrease
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Which statement is correct
concerning NAFTA’s role in trade
1.
2.
3.
4.
NAFTA was replaced by the
EU and is no longer relevant
It is an agreement that
promotes more free trade
The countries that agreed to
NAFTA were anti-trade
before the agreement
NAFTA establishes many
trade barriers between the
US and Mexico
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A US tariff is placed on all imported
MP3 players. Which statement is true?
1.
2.
3.
4.
Domestic producers of MP3
players will be hurt because they
will now have more competition.
Foreign producers of MP3 players
will be hurt because their goods
are more expensive now.
Domestic consumers will be
helped because there will be
fewer goods to choose from.
Foreign producers by MP3 players
will be helped because the
domestic goods are more
expensive now.
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If a country wanted to implement a barrier to trade
that would help its producers AND consumers,
which option would be best?
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Embargo
Quota
Tariff
Subsidy
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Countries X and Y both produce salt and sugar. They have
the same opportunity costs for both goods. Based on their
information, which is true concerning trade between these
countries?
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There is no information concerning
absolute advantage so a decision
about trade cannot be reached.
Country X has comparative
advantage in sugar and Country Y
has comparative advantage in salt.
Since neither has comparative
advantage, they will not benefit from
trade with each other.
They should flip a coin to decide who
should produce sugar and then trade
to be better off.
Th
1.
If the government pays a business a
subsidy, what is MOST likely to happen in
that market?
1.
2.
3.
4.
The market will see an
increase in supply of the
good.
The market will see an
increase in demand for the
good.
There will be a decrease in
demand for the good.
There will be a decrease in
the quantity supplied.
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Which BEST describes
exchange rates?
1.
2.
3.
4.
The price of one nation’s
currency in terms of another
An interest rate charged to
consumers who take out a
loan
An increase in the price of a
market basket over a given
time period
The difference between the
total number of exports
minus the number of imports
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Country X has decided that economic growth will
be their primary goal for the next several years.
The best way to achieve this would be to
1.
2.
3.
4.
Invest heavily in the stock
market
Invest in capital and
education of workers
Decrease trade with other
countries and focus on more
domestic production
Reduce the amount of
government spending
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Which headline would ASEAN
be MOST LIKELY to oppose?
1.
2.
3.
4.
“Philippines considering
subsidies to fishing industry.”
“Vietnam to remove quotas on
Malaysia.”
“Canada favors trade with
Mexico over the US.”
“Germany increasing tariffs on
French goods.”
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One argument in favor of a tariff
would be that it would
1.
2.
3.
4.
Help foreign producers by
allowing them to ship goods
to the US
Reduce competition for
domestic producers
Force foreign companies to
ship goods that meet certain
quality standards in the US
Help domestic consumers
by allowing them to pay a
lower price
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How do tariffs affect domestic
consumers over time?
1.
2.
3.
4.
There is a wider variety of
goods available
The consumers pay lower
prices for both foreign and
domestic goods
Fewer foreign goods are
available and domestic
producers will likely increase
prices
Domestic goods are more
expensive, but foreign goods
are cheaper
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Which trade barrier is associated with laws
that require certain shipping methods and
proper handling of food or equipment?
1.
2.
3.
4.
Embargoes
Subsidies
Quotas
Standards
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The United States does not allow any
company to legally import goods from Cuba.
This type of trade barrier is known as a/an
1.
2.
3.
4.
Subsidy
Quota
Embargo
Standard
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The United States exports $10 million worth of farm
equipment to Nicaragua. In terms of international
accounting, this transaction will show up in
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2.
3.
4.
Only the balance of trade
because it is an export
Neither the balance of trade
or balance of payments
because it deals with money
not goods
Both the balance of trade and
balance of payments
Only the balance of
payments because it is an
export
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Trade will MOST LIKELY take
place when two countries
1.
2.
3.
4.
Specialize in producing
goods in which they
have absolute
advantage
Produce essentially the
same goods
Have the same
opportunity costs in
goods
Specialize in producing
goods in which they
have comparative
advantage
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Suppose the EU removes ALL tariffs, embargoes,
subsidies, and quotas. What is MOST LIKELY to
happen to the international value of the Euro?
1.
2.
3.
4.
Depreciate, because
Americans will want more
European goods
Appreciate, because
Europeans will buy more goods
from other countries
Depreciate, because
Europeans will buy more goods
from other countries
No change because trade
barriers do not affect exchange
rates
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