The advantages of manufacturing goods in a particular country and exporting them to foreign markets:
A. Are significantly enhanced when that particular country's currency grows weaker relative to the currencies of the countries where the products are being exported and sold.
B. Are largely unaffected by fluctuating currency exchange rates.
C. Are largely unaffected by issues of country to country import policies and cultural differences.
The advantages of manufacturing goods in a particular country and exporting them to foreign markets:
A. Are significantly enhanced when that particular country's currency grows weaker relative to the currencies of the countries where the products are being exported and sold.
B. Are largely unaffected by fluctuating currency exchange rates.
C. Are largely unaffected by issues of country to country import policies and cultural differences.
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Related questions
1.Purchasing power parity implies that
a. the real exchange rate is equal to 1.
b. the law of one price does not hold.
c. inflation rates are equal across countries.
d. the real exchange rate is equal to 0.
e. if the domestic country has low prices, then the domestic currency will depreciate until foreign citizens can buy the same amount of goods as domestic citizens.
2.Which of the following is a prediction from the PPP model of exchange rates?
A. An increase in the US money supply leads to an appreciation of the dollar in the long run.
B. An increase in US production leads to a depreciation of the dollar.
C. An increase in US production will lead to a proportional increase in the inflation rate.
D, An increase in the US money supply leads to a depreciation of the dollar in the long run.
E.An increase in the US interest rates leads to a fall in prices.
3.Relative purchasing power parity predicts that
A.the difference between the inflation rates in the two countries should equal the ratio of the interest rates in the two countries.
B. the difference between the inflation rates in two countries should equal the per cent change in the exchange rate.
C.inflation rates should be equal across countries.
D.the real exchange rate should equal one.
E.relative price levels in the two countries should be equal when expressed in the same currency.
4.Which of the following is NOT a valid explanation for the failure of purchasing power parity?
a. Differences in monetary policies across countries
b. Lack of competition
c. Transportation costs
d. Trade barriers
5.If P represents (the level of) domestic prices, P* represents (the level of) foreign prices and E represents the exchange rate as units of domestic currency per units of foreign currency, then the real exchange rate equals
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a. EP/P* |
b. P*/EP |
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C. E/PP* |
d. EP*/P |
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e. P/P* |
6.The difference between nominal and real interest rates is that
A.Nominal interest rates are measured in terms of a country's output, while real interest rates are measured in monetary terms
B.Nominal interest rates are measured in monetary terms, while real interest rates are measured in terms of a country's output
C.Nominal interest rates can fluctuate, while real interest rates always remain fixed
D.Real interest rates can fluctuate, while nominal interest rates always remain fixed
E.Real interest rates are the same in every country, while nominal interest rates are different for every country
7.Which of the following is predicted to cause the value (or price or cost) of U.S. goods to appreciate relative to the value (or price or cost) of foreign goods in the long run?
a. An increase in the growth rate of U.S. GNP. b. A decrease in the growth rate of U.S. GNP.
c. A decline in the growth rate of the U.S. money supply.
d. An increase in the price of petroleum that reduces world demand for American cars. e. An appreciation of the dollar.
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Q1. Import quotas are a. methods for reducing imports by limiting the quantity of goods that can enter the country each year b. voluntary agreements by exporting countries to limit sales in a foreign country c. subsidies to foreign producers to encourage them to trade d. none of these Q2. Devices that set up multiple exchange rates between the currencies of two nations are known as a. tariff quotas b. export subsidies c. exchange controls d. variable currencies Q3. The international organization that replaced the General Agreement on Tariffs and Trade (GATT) is the a. World Bank b. Export-Import Bank c. World Trade Organization d. International Monetary Fund Q4. Dumping refers to the practice of a. flooding a foreign market with large quantities of a good b. selling a product abroad at a price below cost or below the domestic price c. exporting inexpensive products to foreign countries d. selling surplus goods abroad with counterfeit brand names Q5. Countries engage in trade because a. the exchange is mutually beneficial b. governments force industries to exchange c. international law dictates that exchange must take place d. all of these Q6. According to the U. S. Department of Commerce, all persons, unrelated or related, who occupy a housing unit comprise a. a family unit b. a household c. an extended family unit d. group living Q7. A country with an equal distribution of income will have a higher standard of living than a country with a more unequal distribution of income. a. true b. false Q8. Welfare caseloads tend to fluctuate with a. business cycles b. weather c. stock markets d. minimum wage rates Q9. The official poverty threshold line is adjusted annually for a. income taxes b. inflation c. average household size d. average family size Q10. For many welfare recipients, taking a job reduces income. a. true b. false Q11. It is true that a stable economy occurs when a. total injections into the circular flow are large enough to make up for government tax leakages b. total leakages from the circular flow are great enough to offset the effects of government spending c. total planned leakages from the circular flow are exactly equal to total planned injections into the circular flow d. actual saving is equal to planned investment Q12. The measure of income received by persons from all sources is known as a. personal income b. national income c. gross domestic product d. net national product Q13. Discharges of chemicals from a paper plant that pollute a nearby river represent an example of a. internal costs b. the underground economy c. social costs d. transfer costs |
