Answer:
1. Read the information in the chart about two trading partners. Then answer the question that follows. Based on the information in the chart, which of the following is correct? Select all that apply.
A) Country X should specialize in automobiles and Country Y should specialize in airplanes.
D) Country X has both an absolute and a comparative advantage in the production of automobiles.
E) Country Y has a comparative advantage in the production of airplanes.
2. While the balance of payments involves a record of all transactions between individuals, businesses, and the government within a particular country, the balance of trade deals solely with
C) imports and exports
3. 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?
D) tariffs and a quota
4. How do economic barriers to trade impact countries that enact them? Select all that apply.
C) by limiting consumer choice
E) by causing prices of domestic goods to rise
5. Why do some people oppose free trade agreements?
B) Free trade agreements usually require countries to reduce trade barriers that protect domestic industries.
6. Use the table of currency exchange rates to answer the 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?
Kenya
7. Suppose the value of the Japanese yen appreciates relative to the US dollar. Who would this benefit? Select all that apply.
A) Japanese importers of goods from the United States
E) Japanese tourists visiting the United States
Explanation: Just took the test and these are what they say are the correct answers.
