Chapter1:IntroductionWhichstatementmostaccuratelydescribesUStradesince1960?Importscontinuallyexceededexports.Exportscontinuallyexceededimports.Exportsandimportsweremorethan50%ofGDP.BothimportsandexportsgrewasashareofGDP.WhichofthefollowingisNOTtrue?Asashareoftheireconomies,smallcountriestrademorethanlargecountries.Importscannotexceedexportsbecausetradewillbecomeunbalanced.Economistsbelievethattradegenerallybenefitscountriesasawhole.U.S.importscurrentlyexceedU.S.exports.Thephrase"gainsfromtrade"describes:Thebenefitfortwocountrieswhentheytradeormakeatransaction.Theprofitofmiddlemeninatradeoratransaction.Profitsmadebybusinessintradeoratransaction.Consumersurplus.AcomplaintthateconomistssometimesmakeagainstinternationaltradeisthatitdoesnotbenefitlargecountriesliketheUS.doesnotbenefitconsumers.weakensanation'ssecurity.changesthedistributionofincomeinanunfavorableway.DavidRicardoarguedthattradeoccursbetweencountriesbecauseofdifferencesinendowmentsoffactorsofproduction.differencesinthesizeoftheireconomies.differencesinclimateandresources.differencesinlaborproductivity.Intheory,whichofthefollowingshouldbemostaversetointernationaltrade?Countriesthataremoreefficientatproducingthanothercountries.Countriesthatarelessefficientatproducingthanothercountries.Ownersofresourcesthatare"specifically"usedinindustriesthatcompetewithimports.Consumers.Sincethe1990stheWorldTradeOrganizationhasrefusedtoacceptcost-benefitanalyses.theNorthAmericanFreeTradeAgreementhasallowedtradebetweenUSandChina.tradepolicyhasbeenmostlydeterminedbyconflictsbetweennations.ananti-globalizationmovementhascontinuedtofighttradenegotiations.Asystemoffloatingexchangerateshascurrencieswhosevaluesarefixedbygovernments.arefixedintermsofgold.fluctuateaccordingtomarketconditions.arefixedintermsoftheUSdollar.Whichofthefollowingorganizationsreviewstradeagreementstodetermineifcountriesarekeepingtheirpromises?USCongress.TheUnitedNations.TheOrganizationforEconomicCooperationandDevelopment.TheWorldTradeOrganization.WhichofthefollowingisNOTtrueregardinginternationalcapitalmarkets?Currencyfluctuationscancausethevalueofassetsinthemarkettobecomeunstable.Manycountriesregulateforeigninvestment.Thevalueofassetstradedinthemarkethasfallensincethedebtcrisisof1982.Nationsmaybeabletodefaultontheirdebt.Chapter2:WorldTrade:AnOverviewIn2003,theUShadthelargesttotalamountofimportsfromandexportstoGermany.Canada.Mexico.theUnitedKingdom.China.Initsmostbasicform,thegravitymodelsaysthatthemostimportantfactorsthatdescribetheamountoftradebetweencountriesaredifferencesinwagesandtechnologybetweencountries.theamountthatthecountriesproduceandthedistancebetweenthem.theculturalaffinitybetweenthecountriesandtheexistenceorlackofacommonlanguage.differencesintheamountofworkersandphysicalcapitalbetweencountries.thetariffbarriersbetweenthecountriesandthecostsoftransportation.Evidenceshowsthattheeffectofbordersisnotimportantwhencomparinginternationaltradewithtradebetweenregionswithinacountry.theamountoftradethatacountryundertakesisnotrelatedtoitsgeography.countriesfartheraparthavelesstradebetweenthemonaverage.theamountoftradebetweencountriesisnotrelatedtotheculturalaffinitybetweenthecountries.theamountofUStradereacheditspeakin1950.TheNorthAmericanFreeTradeAgreementhasshownthatinternationalbordersnolongeraffecttheamountoftradebetweencountries.hasreducedtariffsandother...
