If the United States were to stop trading with other nations, economists would predict that in the long run the United States would end up with:
A. more jobs.
B. lower prices.
C. a lower standard of living.
D. a higher standard of living.
Answer: C
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Suppose that the effective return to a U.S. investor from buying a U.K. bond is 5.55%. Forward and spot exchange rates ($/£) are 2.10 and 2.00 respectively. The interest rate on the U.K. bond is most likely equal to:
A) 5.45% B) 5.500% C) 5.650% D) 5.60%
Which of the following words best reflects the initial attitude of less-developed countries toward GATT?
a. grateful, because it provided them with subsidies b. proud, because it recognized the special status they had in world trade c. unknowing, because it started out as a secret organization d. annoyed, because they saw it as a rich man's club e. terrified, because it seemed as if it was designed to reimpose colonialism