Further trade opening is beneficial even if the monetary value of the gains is not high.
Indicate whether the statement is true or false
Question 2 - Suppose that the nominal exchange rate between the U.S. dollar and the Canadian dollar is 0.75 U.S. dollars per Canadian dollar. If Canada's rate of inflation is 0 percent and the U.S. rate is 10 percent, then the real exchange rate for the U.S. dollar will
A) appreciate by about 9 percent.
B) appreciate by 10 percent.
C) depreciate by about 9 percent.
D) depreciate by 10 percent.
Question 3 - A free trade agreement plus a common set of tariffs toward non-members is called
A) a common market.
B) a customs union.
C) a free trade area.
D) an economic union.
Question 4 - U.S. trade with the rest of the world is a larger share of GDP than is typical for developed countries.
Indicate whether the statement is true or false
Question 5 - In the global recession of 2007-2009, world trade declined because nations closed their markets to trading partners.
Indicate whether the statement is true or false
Question 6 - Suppose that the nominal exchange rate between the U.S. dollar and the Mexican peso is 0.10 dollars per peso. If Mexico's inflation is 10 percent and the United States' inflation is 0 percent, from the U.S. point of view, the real exchange rate
A) appreciates to 0.11 dollars per peso.
B) depreciates to 0.11 dollars per peso.
C) appreciates to 0.09 dollars per peso.
D) depreciates to 0.09 dollars per peso.
Question 7 - What is MFN status? How does the WTO reconcile the principle of equal treatment with the preferential treatment created by regional trade agreements?
What will be an ideal response?
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