Suppose the exchange rate in the year 2010 was 4 yuan per dollar and in 2011 the exchange rate fell to 3 yuan per dollar
If the price of a Chinese sweater was 120 yuan in both years, the new dollar price in 2011 would be ________ and imports of Chinese sweaters would ________.
A) $30; increase
B) $40; increase
C) $40; decrease
D) $30; decrease
E) $40; stay the same because the price stayed the same at 120 yuan
C
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Empirical tests of the HO model have had mixed results. One explanation for this is that
A) the Ricardian model is more detailed. B) it is difficult to measure factor endowments. C) it does not explain the effects of trade on income. D) it assumes that countries have different technologies.
Commercial policy is government policy that influences:
a. the operation of commercial banks. b. domestic trade flows. c. domestic private corporations. d. international trade flows. e. the operation of capital markets.