International Trade Clicker Questions

Document created by Elizabeth Uva Employee on Mar 31, 2015Last modified by Elizabeth Uva Employee on Apr 1, 2015
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In January 2003 the average exchange rate of the euro to the dollar was .941605. In December 2003 the average rate was .813343 euros to the dollar. This means that the dollar:

 

A. was weaker at the end of 2003 versus the euro than it was at the beginning of 2003.

B. was stronger at the end of 2003 versus the euro than it was at the beginning of 2003.

C. Neither. The exchange rate does not reflect the strength or weakness of a currency.

 


 

If The United States can produce more of all goods than Mexico, then:

 

A. the U.S. will never benefit from trading with Mexico.

B. Mexico should buy everything from the U.S.

C. The U.s. can still benefit from trading with Mexico if it specializes in goods where the U.S. has a comparative advantage.

D. The U.S. can still benefit from trading with Mexico if it specializes in goods where the U.S. has an absolute advantage.

 


 

Tariffs on imports have the following impact on DOMESTIC goods:

 

A. lower quantity and lower prices

B. lower quantity and higher prices

C. higher quantity and lower prices

D. higher quantity and higher prices

 


 

In Country A, watches sell for $200; in Country B, watches sell for $150. If trade is allowed between these two countries, we would expect the price of watches to

 

A. rise to $200 in Country B.

B. fall to $150 in Country A.

C. stay the same in both countries.

D. converge to some price between $150 and $200 in both countries.

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