Name three barriers to international trade.

List five arguments that are commonly used to support the protectionist argument.

How does the lack of certain raw materials force nations to become interdependent?

Explain how trade deficits correct themselves under flexible exchange rates.

For the pairs of terms below, write a sentence or short paragraph showing how the two are related.

balance of payments flexible exchange rates

Describe how foreign exchange is used in trade

Analyzing Information Some people think the Unites States should return to a system of fixed exchange rates. Defend or oppose this view. Cite examples to support your position.

Explain how doubling the $400 tax-free limit on goods brought in from abroad by American citizens would affect the balance of payments.

Read the following passage about U.S. trade with other nations. Use the stated facts and your own knowledge to answer the question that follows. In the early 1980s, American producers found it increasingly difficult to sell their products to other countries. At least part of this problem was the result of the high value of the dollar. To buy American products, foreign nations must trade their currency for dollars. When the dollar’s value is too high, foreign nations receive fewer dollars in exchange for their money. Beginning in the mid-1980s, the value of the dollar declined in relation to foreign currencies. That was like putting American products on sale to foreign buyers. U.S. exports increased sharply.

From this passage, what can you infer about fluctuations in U.S. trade?

Outline the benefits to a business of using non-financial methods of motivation.

Explain how comparative advantage can make trade between countries of different sizes possible.

How do businesses assess the effectiveness of their advertisements?

Explain why international trade is important in today’s economy.

Read the following passage about U.S. trade with other nations. Use the stated facts and your own knowledge to answer the question that follows. In the early 1980s, American producers found it increasingly difficult to sell their products to other countries. At least part of this problem was the result of the high value of the dollar. To buy American products, foreign nations must trade their currency for dollars. When the dollar’s value is too high, foreign nations receive fewer dollars in exchange for their money. Beginning in the mid-1980s, the value of the dollar declined in relation to foreign currencies. That was like putting American products on sale to foreign buyers. U.S. exports increased sharply.

From this passage, what can you infer about fluctuations in U.S. trade?