Discuss the relationship between world trade and world Gross Domestic Product (GDP) since the early 1950s
What will be an ideal response?
Both world trade and world GDP have grown substantially since the early 1950s, but trade has grown much more than has GDP. Both imports and exports as a percent of GDP have increased for the United States as well.
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Refer to Figure 2-1. ________ is (are) technically efficient
A) Point A B) Point B C) Point C D) Points B and C
The study of exchange rate determination is a relatively new part of international economics, since
A) for much of the past century, exchange rates were fixed by government action. B) the calculations required for this were not possible before modern computers became available. C) economic theory developed by David Hume demonstrated that real exchange rates remain fixed over time. D) dynamic overshooting asset pricing models are a recent theoretical development. E) the exchange rate never fluctuates.
The greater are foreign tradable goods price fluctuations, the more likely that authorities will choose a ________ exchange rate system
A) floating B) fixed C) crawling peg D) dual
When interest rates rise, the price of bonds:
(a) Increases (b) Decreases (c) Stays the same (d) can be determined.