Answer the following questions true (T) or false (F)
1. Protectionism refers to the use of trade barriers to shield domestic firms from foreign competition.
2. The process of countries becoming more open to foreign trade and investment is known as outsourcing.
3. Jobs lost to foreign trade are generally easy to identify, but jobs created by foreign trade are generally less easy to identify.
1. TRUE
2. FALSE
3. TRUE
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Use the following table, which shows the supply and demand schedules for the euro, to answer the next question.Quantity of Euros SuppliedPriceQuantity of Euros Demanded400$1.101003601.002003000.903002860.804002670.70500Under a flexible exchange rate system, what will be the rate of exchange for one euro?
A. $0.80 B. $1.00 C. $0.90 D. $1.10
Assuming the United States is the "domestic" country, if the real exchange rate between the United States and Russia decreases from 28 to 23,
A) the prices of U.S. goods and services have increased by 22% relative to Russia. B) the prices of U.S. goods and services have decreased by 5% relative to Russia. C) the prices of U.S. goods and services have increased by 25.5% relative to Russia. D) the prices of U.S. goods and services have decreased by 18% relative to Russia.
Optimal decisions are made
A) if information about prices and marginal utilities is known. B) in the marketplace. C) at the margin. D) when marginal utility is minimized.
The net exports effect exists because a:
a. higher price level will reduce interest rates and stimulate foreign investment. b. lower price level will make domestically produced exports less expensive relative to foreign goods. c. higher price level will reduce the purchasing power of money. d. lower price level will encourage Americans to import more foreign goods.