1.What impact will an appreciation of the dollar (a "stronger" dollar; an increase in the value of the dollar) have on the relative price of foreign goods to Americans, and the relative price of American-made products to foreigners? What will likely happen to America's trade deficit?

2.Who benefits and who is hurt by trade barriers? Who benefits and who is hurt by more free trade (lower trade barriers)? How might this play out politically?

3.Which type of trade barrier is most advantageous from the government's perspective? Why?

4.How could an increase in a nation's fiscal deficit increase its trade deficit?

5.What will likely happen to a nation's balance of payments if its GDP and income levels increase?