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Exam 2: The Global Economy

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Question 21

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Quotas are taxes on imported goods.

A) True
B) False

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Question 22

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High environmental standards for emissions from cars set by the European authorities are an example of a possible nontariff barrier.

A) True
B) False

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Question 23

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The U.S.Commerce Department reaches a deal with the Russian government.The Russian government agrees to only export 750,000 tons of steel from Russia to the United States.This is called a(n) ____.

If Spanish workers can produce 100 cars or 50 elevators and a Russian worker can produce 60 cars or 20 elevators,the theory of comparative advantage would suggest that

For a free floating currency,the exchange rate is affected by

Skiwell is a world-famous,high-performance,quality snow ski export manufacturer.Skiwell's snow skis have been thoroughly and successfully tested in numerous snow situations in Europe.Skiwell decides to enter the Japanese market.The Japanese government requires the company to conduct numerous lengthy performance and safety tests of their skis on Japanese snow before the export shipment can be sent.They claim that Japanese snow may somehow be different than European snow.Most likely this is a(n) ____.

Most favored nation (MFN)status occurs when two countries agree bilaterally to give each other preferred trading rights.

Which country is most likely to have a soft currency?

On December 23,2006,one U.S.dollar was worth 0.76 euros (exchange rate 1:0.76) .On December 23,2009,the U.S.dollar was worth 0.70 euros (exchange rate 1:0.70) .The euro ____ between 2006-2009.

Transactions in which domestic residents purchase assets from abroad are considered

Denise is taking her first international trip.She travels from the United States to France.She gives the bank located at the French airport US$100.They give her back €82.69.When she asks why,the bank teller informs her,"It's because of the ____."

Mexico's president,Vincente Fox,argued that the North America Free Trade Association (NAFTA) should be expanded.He believed that Canada,the U.S. ,and Mexico should establish common external trade barriers to non-NAFTA countries and allow for the free flow of labor and capital within NAFTA countries.This is an example of a(n) ____.

The ____'s original goals were to promote orderly and stable foreign exchange markets,restore free convertibility of member nations' currencies,reduce international trade impediments,and provide assistance to countries that experienced temporary balance-of-payments deficits.

High inflation rates can cause a currency to appreciate.

In Thailand,the ____ guaranteed government bonds for the Electricity Generating Authority.The guarantee attracted investors and spawned interest in similar programs in South Korea and the Philippines.

A U.S.multinational would likely evaluate the performance of its Mexican subsidiary in terms of

The European Union is an example of a monetary union.

Transparency was a founding principle of

Country X specializes in producing the goods it produces most efficiently,and Country Y buys the products it produces less efficiently from other countries,even if it could produce the good more efficiently itself.The behavior of these countries can be explained by ____ advantage theory.

A substantial proportion of India's ____ consists of information technology consulting,customer service,financial,and telecommunication services and remittances from Indians living abroad.