Problem 1
Explain the differences between the terms in each of these pairs: a. foreign exchange market b. fixed rate of exchange foreign exchange rate flexible rate of exchange c.trade surplus trade deficit
Problem 1
Explain the difference between the terms in the following pairs: a. specialization and economic interdependence b. absolute advantage and comparative advantage c. export and import
Problem 2
What is an advantage of a trade surplus? A disadvantage?
Problem 2
Why would a country engage in dumping?
Problem 2
What principle explains why nations specialize and trade?
Problem 3
Explain why trade is good for nations that produce exports as well as buy imports.
Problem 3
How do customs unions help member nations?
Problem 3
What is an advantage of a trade deficit? A disadvantage?
Problem 5
What are some advantages of NAFTA?
Problem 7
Making Inferences and Drawing Conclusions Some regional trade associations are viewed as an attempt by less developed countries to protect themselves and their regions from globalization's aggressive momentum. Explain how regional groups might have that effect.
