The amount of U.S. exports purchased by the rest of the world is primarily determined by
a. real disposable income in the United States
b. real disposable income in other nations
c. the real interest rate in other nations
d. the real interest rate in the United States
e. the government budget deficits in other nations
B
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The idea that nations in a currency union will have fewer trade barriers or other frictions may have the dual effect of:
A) increased integration and more risk of debt default. B) increased political harmony and less risk of asymmetric shocks. C) economies of scale and specialization as well as higher risk of asymmetric shocks. D) economic growth and an increase in environmental degradation
The tendency for a(n) ________ in the economic activity of one country to lead to a ________ in economic activity is the trade feedback effect.
A. decrease; worldwide increase B. increase; worldwide increase C. increase; worldwide decrease D. none of the above