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International Trade Study Guide Flashcards

1
Q

Comparative advantage is the ability to produce a good or device at a ___ ___

A

A lower cost

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2
Q

Absolute advantage is the ability to produce _____ of a good or service with the same inputs

A

more

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3
Q

Which one is trade based on

A

Comparative advantage

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4
Q

Why is trade not like sports

A

Bc both sides are better off with trade

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5
Q

Who trade

A

People and firms

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6
Q

who doesn’t trade

A

Nations

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7
Q

If a production cost of T-shirts in Columbia is $1.25 and in the USA is $9.50, which nation has comparative advantage

A

Columbia

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8
Q

If a production cost of T-shirts in Columbia is $1.25 and in the USA is $9.50. Who will export t-shirts and who will import them

A

Export: Columbia
Import: USA

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9
Q

Many Free Trade Agreements began in the early 1990s because ____ made it easier to borrow, lend, invest, import and export with other nations

A

the internet

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10
Q

Who are the largest trading partners of the United States

A

Canada, Mexico, and China

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11
Q

An exchange rate is the value of one currency in terms of _________ __________

A

Another currency

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12
Q

Currency values fluctuate due to changes in ____ and ____ in the Foreign Exchange Market

A

S and D

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13
Q

If Canada’s currency appreciates, its exports are likely to ____

A

fall

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14
Q

If Canada’s currency depreciates, its exports are likely to

A

rise

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15
Q

US exporters will benefit if the USD

A

depreciates

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16
Q

US importers will benefit if the USD

A

appreciates

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17
Q

US tourists abroad will benefit if the USD

A

appreciates

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18
Q

Foreign tourists in the US will benefit if the USD

A

depreciates

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19
Q

The World Trade Organization acts as a _____ between nations who trade

A

referee

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20
Q

Is a nation that does not trade

A

Closed economy

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21
Q

is a nation that is open to trade with other nations

A

Open economy

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22
Q

Protectionism is the use of ____ to trade in order to protect ____ ____

A

barriers
domestic producers

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23
Q

Examples of Protectionist policies

A

Tariffs and quotas
Long and expensive process
Higher quality standards for imports

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24
Q

What is an argument for protectionism that you think is valid

A

Dumping, infant industry

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25
Why don't economists favor protectionism
The benefit for a few firms does not outweigh harm to all consumers
26
If Brazil trades with other nations but puts a protectionist tariff of $1 per pound on imported $10 soybeans, what will the price of soybeans be in Brazil
$11
27
Who is worse off after this soybean tariff
Soybean consumers
28
Who is better off after this soybean tariff
Soybean producers
29
A downstream effect of this soybean tariff would be the ____ _____ for Brazilian tofu factories
High cost
30
A quota is a ___ on ___
Limit imports
31
Who benefits from a quota on imported coal
Domestic coal producers
32
If Egypt puts a quota on imported coal, will the price of a coal rise or fall in Egypt
rise
33
Who is worse off after a coal quota
Anyone who buys coal
34
Who is better off after this coal quota
Domestic coal producers
35
Who pushes for tariffs and quotas
Producers
36
The difference in value of exports and imports is called
Balance of Trade
37
If South Korea has a trade deficit, its ____ are greater than its ____ (wealthy)
imports exports
38
If South Korea has a trade surplus, its ____ are greater than its ____ (poor)
exports imports
39
Since all trade is voluntary, goods and services traded are paid for, a Trade Deficit does not involve any ___, so it is not an economic problem
debt
40
When Congress overspends and must borrow, that is called a ____ ____, which increases National Debt, so that is an economic problem
Budget Deficit
41
If S go up P will go ___ If S go down P will go _
down up
42
If D go up P will go ___ If D go down P will go _
up down
43
In Jan, the exchange rate for $1 US is 100 Kenyan Shillings. In July, the exchange rate for $1 US is 98 Ksh The dollar (depreciated/appreciated)
depreciated
44
In Jan, the exchange rate for 1E is $1 US. In July, the exchange rate for 1E is $1.10 US The dollar (depreciated/appreciated)
depreciated
45
In Jan, the exchange rate for 1E is 600 Chilean pesos. In July, the exchange rate for 1E is 550 Chilean pesos Which currency appreciated
Chilean pesos
46
Depreciation of the US dollar benefits
exporters Hospitality industry
47
Appreciation of the US dollar benefits
importers American tourists abroad
48
There will be more demand for your currency if
appreciation -trading partners increase their demand for your goods and services - trading partners get wealthier
49
There will be less demand for your currency if
depreciation - recession -trading partners decrease their demand for your goods and services
50
If more paper clips are sold,
Both buyer and seller will be better off
51
If fewer paper clips are sold
Both buyer and seller will be worse off
52
There is inflation in Kenya and now the price of 10 paper clips in Kenya is 200 shillings instead of 100 Is the American buying imported paper clips better off or worse off Is the Kenyan paper clip producer better off or worse off
worse off
53
The Kenyan Shilling appreciates Is the American buying imported paper clips better or worse off Is the Kenyan paper clip exporter better or worse off Is an American tourist in Kenya worse or better off
worse off
54
The US dollar appreciates Is the American buying imported paper clips better or worse off Is the Kenyan paper clip exporter better or worse off Is an American tourist in Kenya worse or better off
better off
55
There was a US tariff on foreign paperclip imports that is removed Is the American buying imported paper clips better or worse off Is the Kenyan paper clip exporter better or worse off
better off
56
When the dollar depreciates, American purchasing power (grows, shrinks). Imports will (more expensive, less expensive) for Americans. The US dollar is said to be (weaker/stronger)
shrinks more expensive weaker
57
If interest rates in the US rise, demand for the US dollar in the ForEx market will (increase, decrease). The US dollar will (appreciate, depreciate). The US dollar is said to be (weaker/stronger)
increase appreciate stronger
58
Inflation in Venezuela results in a ForEx market (increase, decrease) in demand for the Bolivar, causing the Bolivar to (appreciate, depreciate)
decrease depreciate
59
An increase in incomes in the US causes the supply of US dollars in the ForEx market to (increase, decrease). The dollar will (appreciate, depreciate) and the Japanese Yen will (appreciate, depreciate)
increase depreciate appreciate
60
If the US has a tax cut relative to the EU the demand for the euro in the market will (increase, decrease) and the euro will (appreciate, depreciate)
increase appreciate
61
If there is a sudden rise in demand for Kenyan goods, the shilling will (appreciate, depreciate). This means the shilling is (stronger, weaker) in relation to its trading partner currencies
appreciate stronger
62
A decrease in the US demand for Chinese goods will (increase, decrease) the demand for Chinese yuan and the yuan will (appreciate, depreciate)
decrease depreciate
63
If the exchange rate for one US dollar changes from 1 E to 1.3 E, the US dollar is (weaker, stronger) and the euro is (weaker, stronger)
stronger weaker
64
If the exchange rate for one US dollar changes from 1 E to .75 E, the US dollar is (weaker, stronger) and the euro is (weaker, stronger)
weaker stronger
65
If the exchange rate for one US dollar changes from 1.2 E to 2 E, the euro has (appreciated, depreciated)
depreciated
66
Purpose of a tariff or quota
To shield domestic producers from competition
67
how do tariffs benefit a nation that quotas don't
tax revenue
68
results of tariffs and quotas
Price goes up Imports go down Domestic production goes up Domestic consumption goes down
69
What makes trade easier
free trade, no barriers
70
Exporters and hospitality firms (depreciate/appreciate)
depreciate
71
Importers and tourists (appreciate/depreciate)
appreciate

Economics (7 decks)

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