ECO 372 Week 5 DQs

Discussion Questions

Explain how foreign exchange rates are determined. How do changes in interest rates, inflation, productivity, and income affect exchange rates? What are the advantages and disadvantages of a weak versus a strong dollar for imports, exports, international and domestic markets?

Who benefits from a tariff or quota? Who loses? Why would domestic markets benefit from protectionist trade policies? How do protectionist trade policies affect a governments wealth and fiscal policy?

What is the effect of a trade surplus? What is the effect of a trade deficit? How do trade deficits and surpluses affect the industry in which you work?

Why are trade agreements important for the various countries involved? How is international trade related to the U.S. standard of living as opposed to the standard of living of a small industrial nation or a developing nation? How does international trade affect a countrys standard of living? What impact does it have on the way Americans live life, spend, consume, and so on.?