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International Economics
Explore questions in the International Economics category that you can ask Spark.E!
- protective tariffs are needed to allow new domestic industries to establish themselves.
- With regard to exchange rate determination, the law of one price is a useful theory only when applied to:
- An increase in European wealth, all other factors held constant should:
- If Europeans increase their demand for American cars, everything else constant, we should observe the following change in the U.S. dollar-euro market:
- A country running a current account surplus over many years should see its exchange rate:
- An increase in the real interest rate on U.S. bonds, everything else equal, will have the following impact on the foreign exchange market:
- If U.S. assets are seen as having greater risk relative to foreign assets in the market for foreign exchange, this should cause the:
- If in late 2016 100 U.S. dollars exchanged for 118 euros and in mid-2017 100 U.S. dollars exchanged for 127 euros, then:
- If a Japanese Toyota sells for 2,500,000 yen and the nominal exchange rate is 110 yen/$U.S., then the dollar price of the Japanese automobile is:
- highly specialized economies are dependent on international markets for their income.
- If an American traveling abroad can obtain 115 euros for $100 U.S. the current euro per $ exchange rate is:
- value of the next best thing forgone (or sacrificed). Recall this is the same opportunity cost we saw at the beginning of the semester -- it is a very fundamental concept to economics
- the price that would prevail in a closed economy that does not engage in international trade.
- is implemented to shield domestic producers from foreign competition.
- government payment to a domestic producer of export goods and is designed to aid that producer.
- tariffs are needed to protect domestic firms from "dumping" by foreign firms. "Dumping" is the sale of a product in a foreign country at prices either below cost or below the prices commonly charges at home. Most nations prohibit dumping.
- includes onerous (aka very difficult and cumbersome) licensing requirements, unreasonable standards pertaining to product quality, or simply bureaucratic hurdles and delays in customs procedures.
- efficiently produced in countries with an abundance of suitable land
- to benefit from specialization and trade. or the ability of a country to produce a good at a lower opportunity cost than another country.
- protective tariffs are needed to preserve or strengthen industries that produce materials essential for national defense.