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Explain why a country's use of preferential duties is inconsistent with MFN treatment of trading partners by that country.
What is your evaluation of the announced free-trade direction of the country's policy?
Discuss the world price of the good is a reasonable indicator of the amount of domestic interference with free trade in the good?
Who are the winners and losers? What is the size of their gains and losses? What is the net effect on society?
How does an equivalent subsidy to the import-competing producer affect the market? What is the cost to the government of this subsidy?
How does an import quota differ from a tariff? Can the government ever capture the quota rent? If so, how?
What is meant by the term trade triangle? With a given level of world resources, international trade may bring about an increase in total world output.
Identify the basic questions with which modern trade theory is concerned. How did Smith's views on international trade differ from those of the mercantilists?
What are trade remedy laws? How do they attempt to protect U.S. firms from unfairly (fairly) traded goods?
What is meant by the most-favored-nation clause, and how does it relate to the tariff policies of the United States?
What does the balance of international indebtedness measure? How does this statement differ from the balance of payments?
What economic transactions give rise to the receipt of dollars from foreigners? What transactions give rise to payments to foreigners?
Why do nations use a crawling-peg exchange rate system? What advantage does the SDR offer to small nations seeking to peg their exchange rates?
Suppose the spot rate of the pound today is $1.70 and the 3-month forward rate is $1.75. How can a U.S. investor profit from uncovered interest arbitrage?
What are some examples of international commodity agreements? Why have many of them broken down over time?
Why is it that OPEC did not achieve worldwide prominence until the 1970s? What factors contributed to OPEC's problems in the 1980s?
Describe a specific tariff, an ad valorem tariff, and a compound tariff. What are the advantages and disadvantages of each?
Distinguish between consumer surplus and producer surplus. How do these concepts relate to a country's economic welfare?
What factors influence the size of the revenue, protective, consumption, and redistributive effects of a tariff?
What impact does the imposition of a tariff normally have on a nation's terms of trade and volume of trade?
What exchange-rate adjustment can be made to resolve these problems? What if the nation experiences a BOP surplus with inflation?
What impact does an expansionary monetary policy have on the nation's BOP? What about a contractionary monetary policy?
What is meant by the terms policy agreement and policy conflict? What are some obstacles to successful international economic-policy coordination?
In a free market, what factors underlie currency exchange values? Which factors best apply to long-run exchange rates and to short-run exchange rates?
Identify the factors that account for changes in a currency's value over the long run. 6. What factors underlie changes in a currency's value in the short run?