1. When the value of the U.S. dollar falls in relation to the currencies of other nations, what do you think will happen to the quantity of U.S.

(a) imports?

(b) exports?

2. Go through your daily newspaper and identify:

(a) seven or eight news items of an international economic character;

(b) the importance or effect of each of these problems on the U.S. economy;

(c) the importance of each of these news items to you personally.

3. What is the meaning of globalization? What is its advantage and disadvantage? Why is there an anti-globalization movement?

4. What does international trade theory study? International trade policy? Why are they known as the microeconomic aspects of international economics?

5. What were the mercantilists' views on trade? How does their concept of national wealth differ from today's view?

6. Why is it important to study the mercantilists' views on trade? How were their views different from those of Adam Smith? What is the relevance of all this today?

7. What was the basis for and the pattern of trade according to Adam Smith? How were gains from trade generated? What policies did Smith advocate in international trade? What did he think was the proper function of government in the economic life of the nation?

8. In what way was Ricardo's law of comparative advantage superior to Smith's theory of absolute advantage? How do gains from trade arise with comparative advantage? How can a nation that is less efficient than another nation in the production of all commodities export anything to the second nation?

9. What is the exception to the law of comparativeadvantage? How prevalent is it?

10. Why is Ricardo's explanation of the law of comparative advantage unacceptable? What acceptable theory can be used to explain the law?