Answer:
1. The correct options are:
Option A. Country X should specialize in automobiles and Country Y should specialize in aeroplanes.
Option D. Country X has both an absolute and a comparative advantage in the production of automobiles.
Option E. Country Y has a comparative advantage in the production of aeroplanes.
This is because of the opportunity cost and the production amount of the goods. It will be an asset for a country if they use small capital for the production of a large number of goods.
2. The correct answer is:
Option C) imports and exports
The balance of trade agreements wholly depends on imports and exports. It is the major element by which the trade deals are maintained.
The stability between export and import tells about the country's situation of being a trade surplus or deficit position.
3. The correct answer is:
Option D. tariffs and quota.
Tariffs are the tax implemented on import goods and quota is employed to restrict the quantity of a particular type of goods and services. The imposition of this acts as an economic blockade to trade.
4. The correct answer is:
Option C. by limiting consumer choice
Option E. by causing prices of domestic goods to rise
When boundaries like tariffs and quotas are executed then the price of the goods increases due to the limited quantity of the supplies.
5. The correct option is:
option B) Free trade agreements usually require countries to reduce trade barriers that protect domestic industries.
Free trade is opposed because it will lower the price of shipped goods from the country and will result in losses and a drop in the economy.
6. The correct answer is:
Option B. Kenya
The family should visit Kenya as the currency exchange rate in the country is the lowest as compared to other nations. Therefore, they will get most local currency in exchange for the dollar.
7. The correct option is:
Option A.Japanese importers of goods from the United States
Option E. Japanese tourists visiting the United States
The imports would become cheaper and more goods can be imported with fewer funds.
Japanese tourists will be able to enjoy more in the United States as the exchange price will favour them.
Explanation:
