International Trade Unit Review: Name:

Section 1: Trade Barriers**answer on a separate sheet of paper**

Instructions: Determine whether each of the following is a “Tariff”, “Quota”, “Standard”, “Subsidy” or “Embargo” then give the key word or phrase in each description that supports your conclusion.

  1. The U.S. refuses to allow companies to import any cars that do not meet environmental emissions standards
  2. Company XYZ produces cheese in Scotland and exports the cheese, which costs $100 per pound, to the United States. A 20% tax would require Company XYZ to pay the United States government $20 to export the cheese.
  3. In 2010, Mexico imposed a limit of 250,000 tons of sugar that could be imported into Mexico.
  4. In 1962, the United States prohibited all imports and exports to and from Cuba.
  5. In 2006, the United Nations Security Council unanimously adopted a resolution to restrict the export to and the import from Iran on certain items and technology potentially related to nuclear weapons.
  6. Because Australians love their booze, they refuse to import any beers that contain less than 7% alcohol by volume.
  7. In 2010, China announced that it would impose and import a tax on American poultry of up 105.4 percent.
  8. In 2005, the United States limited the imports of Chinese textiles to 7.5% a year. Trade Barrier Identification Cards
  9. In 2017, the United States announced a program that would help pay off the mortgages for individuals who worked in the steel industry.
  10. In June of 2008, President Bush approved a “Farm Bill” which provides monetary support for American farmers.
  11. Britain refuses to import a U.S. shampoo that was tested on animals during production.
  12. In 1990, the Japanese Government announced it would extend its voluntary limit on automobile exports to the United States.
  13. Argentina increased taxes to 9% on the import of milk powder after record levels of imports and fears Argentina farmers would suffer falling incomes.
  14. In 2011, the United States Department of Agriculture increased its annual sugar-import limit to 1.6 million tons for the year.
  15. In 2006, the United Nations passed a Resolution that prohibits states from directly or indirectly supplying North Korea with conventional weapons (battle tanks, artillery, aircraft, missiles, etc.)

Section 2: Balance of Trade, Current Account and Financial Account

Instructions: Check the appropriate boxes to denote whether each transaction is a “Credit” or “Debit” and whether it belongs in the “Current Account” or “Financial Account”

Transaction: / Credit / Debit / Current Account / Financial Account
  1. Harley-Davidson USA purchases $25 million in production machinery from a Japanese company

  1. Mark Cuban, a US entrepreneur invests $50 million to develop a theme park in Malaysia

  1. A German company sells $1 million worth of combat helmets to the U.S. Army

  1. BMW pays $4 million to a U.S. shipper for transporting cars from Germany to the United States

  1. Each month, Rory, who recently arrived in the U.S. sends half of his paycheck to his brother in Northern Ireland.

  1. Wells Fargo pays $5 million in interest payments to French depositors

  1. Senor Garcia from Portugal buys a shopping center in South Carolina.

  1. An Argentine investor buys five $10,000 U.S. Treasury bonds.

  1. British-Sounds a London record store spends $10,000 on CD’s by the Backstreet Boys, an American boy band.

  1. Carrie Underwood an American investor, buys stock in a Canadian ice-rink chain.

  1. Swedish tourists spend $3 million in the United States; U.S. tourists spend $5 million in Sweden

Section 3: Free Trade Arguments**answer on a separate sheet of paper**

Instructions: Read each opinion and decide whether that person would be in favor or opposed to free trade. Support your answer with at least one sentence.

  1. The President wants to increase the production and efficiency of United States manufacturing.
  2. Sammy is an environmentalist and is afraid of corporate companies polluting.
  3. General Patton wants to ensure that our military has no weaknesses and is not reliant on anyone else.
  4. Danny does not care about where his goods come from he simply wants to pay the lowest price.
  5. The President does not trust that the Chinese government would fully open their markets to United States products.
  6. Tim Cook, the CEO of Apple is confident that no country in the world could produce computers and phones cheaper or more efficiently than Apple.
  7. Mia wants to buy more clothes to keep up with seasonal fashion trends, but is limited by her income.
  8. Scott is sick of buying phones that seem to lose battery life after a year or two and wishes that a producer would create a better product.
  9. Mexican President Enrique Nieto believes that if every country dropped their trade barriers everyone would do more business.
  10. Ghana, a historically under developed and poor country, wants to increase its GDP and reduce the deficit in its current account.
  11. The President wants to protect American jobs from being “outsourced”
  12. Johnny thinks that we should specialize in the things that we are best at producing as a nation.

Section 4: Exchange Rates and International Trade**answer on a separate sheet of paper**

Instructions: Reference the exchange rate table. Answer the following questions based upon the information given and your knowledge of the relationship between exchange rates and international trade. (Remember: In the first table $1 U.S. Dollar is equivalent to €.7582 Euros)

2009 Currency Conversions:

Symbol / USD-$ / EUR-€ / GBP-£ / AUD-A$
USD-$ / 1 / .7582 / .6292 / .9728
EUR-€ / 1.3192 / 1 / .8299 / 1.2829
GBP-£ / 1.5896 / 1.2049 / 1 / 1.5459
CNY-¥ / 1.0283 / .7794 / .6458 / 1

2010 Currency Conversions:

Symbol / USD-$ / EUR-€ / GBP-£ / AUD-A$
USD-$ / 1 / .8319 / .7379 / 1.2743
EUR-€ / 1.2019 / 1 / .8869 / 1.5317
GBP-£ / 1.3551 / 1.1274 / 1 / 1.7269
AUD-A$ / .7846 / .6528 / .5790 / 1
  1. Name 3 factors that make a countries currency valuable?
  2. Did the U.S. dollar appreciate or depreciate from 2009 to 2010?
  3. Which currency was the strongest is 2010? Weakest?
  4. In 2010, Tom Brady got paid a $500,000 bonus for winning the Super Bowl. He wants to buy a house in Great Britain that costs £200,000 British pounds. After the purchase how much will he have left over in dollars?
  5. Is it more likely that American manufacturers exported more or less from 2009 to 2010?
  6. Were Australians more likely to import goods in 2009 or 2010?
  7. If an American was planning a vacation which country would be most desirable in 2009?
  8. Explain the relationship between the strength of a nation’s currency and their ability to export goods.
  9. Headline reads: “Citizen Uprisings Lead to Political Uncertainty!”This 2009 headline best fits which nation? Why?