International Economics Quiz 1

Importing more than exporting is

• trade surplus
• trade deficit
• balance of trade
• balance of payment

What is a currency system in which each country tries to keep the value of its currency constant against one another called?

• fixed exchange rate
• flexible exchange rate
• floating currency exchange
• constant pricing

Suppose the exchange rate between the United States and Japan changes from $1 = 100 yen to $1 = 110 yen. What would happen to the prices of American goods in Japan?

• increase or decrease
• decrease
• remain the same
• increase

Floating exchange rates

• are set daily by the Fed
• are an established by an agreement of two nations
• values are determined by supply and demand
• are a result of bilateral agreements

In the short-run, tariffs and quotas help protect

• domestic jobs
• foreign employment
• price wars
• consumer choice

An increase in the value of currency is called

• appreciation
• depreciation
• trade surplus
• exchange rate

If a country can produce a certain good at a lower opportunity cost than another country is has the...

• absolute advantage 
• competition
• specialization 
• comparative advantage

The use of trade barriers to protect a nation’s industries from foreign competition

• Balance of trade
• NAFTA
• Quotas
• Protectionism 

Exports minus imports or how many goods a county exports versus imports

• Exports
• Subsidy
• Quotas
• Balance of Trade

Agreement that will eliminate all tariffs and other trade barriers between Canada, Mexico, and the US

• NAFTA
• EU
• ASEAN
• CARICOM