Question

A family from Zimbabwe, which uses the US dollar as its official currency, is planning to travel. They want to go to the country where they will receive the MOST local currency for their dollars. Which country should they visit?
(picture one)

the United States

Kenya

South Africa

Botswana


Read the passage. Then answer the question that follows.

In 2013, the United States negotiated a new trade deal with Japan in the hope of increasing US rice manufacturers' access to the valuable Japanese consumer market. The Japanese increased the amount of rice that it would import at a low import tax rate to 682,000 metric tons, while any rice imported from the United States over that amount would be subject to a much higher import tax.
This trade policy represents the implementation of a combination of what two types of economic barriers to trade?


Group of answer choices

tariffs and a quota

subsidies and a quota

subsidies and standards

an embargo and standards

Answer 1

Answer:

Q1: Kenya

Q2: tariffs and a quota

Explanation:

Q1:

To answer this question, it is important to know how to interpret the exchange rates on the table. Additionally, keep in mind that we are focussing on US Dollar (USD) in exchange for other countries' currencies; i.e;USD/Pula , USD/Rand , USD/Shilling, and USD/USD. Based on these currency conversions, you'll focus on the last column on the exchange rate table .

Botswana

USD/Pula  = 0.09

This means that, to buy one Pula, you will pay USD0.09

Kenya

USD/Shilling  = 0.01

This means that, to buy one Shilling, you will pay USD0.01

South Africa

USD/Rand  = 0.07

This means that, to buy one Rand, you will pay USD0.07

United States

USD/USD  = 1

USD is just USD so the value remains the same.

Therefore, from the analysis, going to Kenya is the least expensive hence you will receive the MOST local currency.

Q2:

The answer is tariffs and a quota

A tariff by definition is an import tax or custom duties imposed on goods or services brought from one country to be sold in another. The party who pays the import tax is the importer of the good/service. In this case, if U.S rice manufacturers imports rice above above 682,000 metric tons to Japan, they will be responsible for paying a higher import tax to Japan. This is a tariff.

On the other hand, the Japanese restrictions on the quantity of rice imported to its country is an example of a quota. One of the likely reasons why Japan or would impose this is to  offer protection to domestic infant  rice manufacturers from going out of the market since they are still small scale and cannot benefit from economies of scale until they mature. Therefore, a Quota will be the second economic barrier in this question.