1

When Maria Escobar was preparing for her trip to Brazil, she found that she could go to his bank and trade her 10 U.S. dollars for 37.11 Brazilian real (the nation's currency). In this instance, the _____ was one U.S. dollar to 3.711 Brazilian real

exchange rate

balance of payments

foreign trade rate

international trade rate

balance of trade rate

2

If a country specializes in goods that it can produce most readily and cheaply and trades those goods for the goods that another country can produce most readily and cheaply, then both countries are exercising the principle of:

absolute advantage

economics of scale

distinctive advantage

parallel competencies

comparative advantage

3 China imposes a 45 percent tax on the market value of all chickens that are imported from the U.S. into China. Another name for this type of tax is a(n)

embargo

boycott

subsidy

quota system

tariff

4

Besides tariffs, a government can use a number of other tools to restrict trade. Which of the following is NOT a tool the government can use to restrict trade?

import quota

embargo

Boycott

All of the above are tools

5

In 1914, the United States prohibited the importation of Mexican avocados even though Mexico is the world's largest producer of the fruit. This prohibition remained in effect until 1996. The ban on importing Mexican avocados is an example of a(n)

import quota

embargo

subsidy

picketing

tariff