Assignment:
International Trade and Finance
Submit a 4- to 5-page paper that addresses the following questions. Be sure to use references within the paper to support your answers. Show work for all calculations.
1. Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.
2. Because wage rates are so low in Africa, why don't Microsoft, Cisco and other major corporations close down their American operations and move to Africa?
3. Consider the foreign exchange market for Japanese Yen and Dollars. Assume a market where the U.S. dollars are on the x axis as shown in the background material. Indicate whether the dollar would APPRECIATE or DEPRECIATE if the following events occur (be sure to explain your answer such as including reference to the demand or supply curve):
1. The interest rate in Japan is lowered.
2. Prices are lower in U.S.
3. Higher US interest rates.
4. What is the effect of a higher exchange rate on exports and imports?