1. In a typical free trade area:

a. all members are open to FDI from the other members.

b. all members agree to apply the same tariffs to imports coming from outside the member countries.

c. barriers to trade in goods among members are removed or greatly reduced.

d. labor is free to move among members.

e. all the above are true.

2. The currency of the country of Avania falls sharply in value against the currency Bukovina , a neighboring country. Which of the following is a consequence of this exchange rate movement?

a. Bukovia's products will become more price competitive in Avania.

b. Avanian products will become more price competitive in Bukovia.

c. Avania's products will cost more in BUkovis.

d. There will be no difference in the volume or direction of trade.

e. Bukovia's exports to Avanis will increase, because Bukovia's goods will become cheaper im Avenia.