Supply and Demand of Foreign Currency
In 2002, the George W. Bush administration imposed tariffs on certain steel products to protect the US steel industry from foreign dumping. The tariffs, which ranged from 8–30%, were imposed on over 170 steel products, with the exception of Canada, Israel, Jordan, and Mexico. What would happen in the supply and demand market for steel in the trade demand market?
Supply shift to the left. Trusts don’t want to trade at such a loss, so trade for international steel decreases.
On September 11, 2009, the Obama administration announced that they were placing tariffs on low-end tires from China. What would the effect on price be? What would shift?
Prices would rise as supply shifts to the left
The US can produce 20 planes and France produces 12 planes. Who has the absolute advantage?
The US!
a. 30 ft
b. 15 ft
c. 19 ft
d. 17ft
c. 19 ft
On September 11, 2009, the Obama administration announced that they were placing tariffs on low-end tires from China. What would happen to the price? What would shift?
Prices would rise as supply shifts to the left.
In the ‘90s, U.S. paperclip makers accused China of “dumping” on paperclips (the practice of one country flooding another country with a good at a loss to put US competition out of business). The US then decided to place a 127% tariff on the paperclips. As a result of this, what would happen to the firms that would supply the paperclips in the US? Why?
More US firms would supply paperclips as the supply of paperclips for trade would go far down
Korea can produce 3 cars or 9 motorcycles, and Germany can produce 4 cars or 8 motorcycles. Who has the comparative advantage for cars?
Germany!
How long is the Mississippi River?
a. 1005 miles
b. 900 miles
c. 2973 miles
d. 2341 miles
d. 2341 miles
In the ‘90s, U.S. paperclip makers accused China of “dumping” on paperclips (the practice of one country flooding another country with a good at a loss to put US competition out of business). The US then decided to place a 127% tariff on the paperclips. As a result of this, what would happen to the firms that would supply the paperclips in the US? Why?
More US firms would supply paperclips, as a supply of paperclips for trade would go far down.
In the year 2010, it took $1.20 to convert into one euro. In 2011, it was 1.40. How would the depreciation of the dollar affect trade with foreign nations?
American imports will decrease and their exports will increase.
Brazil!
What NBA team has won the most championships?
a. Denver Nuggets
b. Los Angeles Lakers
c. Golden State Warriors
d. Chicago Bulls
b. Los Angeles Lakers