17. The "Most Favored Nation Principle" requires that an economy engaged in international trade, barring WTO-approved specific exceptions, must: Merge its finances and military systems with any nation it favors. Provide to all of its trading partners the same terms as it provides to any of its trading partners. Treat all Regional Trade Agreements (RTAs) the same. Agree to use a common currency with those nations which have a similar foreign exchange rate. a. b. c. d.
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17. The "Most Favored Nation Principle" requires that an economy engaged in international trade, barring WTO-approved specific exceptions, must: Merge its finances and military systems with any nation it favors. Provide to all of its trading partners the same terms as it provides to any of its trading partners. Treat all Regional Trade Agreements (RTAs) the same. Agree to use a common currency with those nations which have a similar foreign exchange rate. a. b. c. d. 18. Which of the following statements is INACCURATE with reference to the reasons why a developed country's government might intervene in its international trade with other countries: a. To protect raw materials,, machinery or technology necessary for the maintenance of its military strength ("National Defense") b. To engage in a preferential trade agreement with another developed country so that each may build its production of industries serving newborns, adolescents, etc. ("Infant Industry") promote continued strength in the overall economy ("Jobs Protection"). country can share the profits available in a market served by few c. To insure that employment in major industries remains available in order to d. To help a firm gain a foothold in an oligopolistic industry so that it and the competitors ("Strategic Trade"). 19. Assume that the foreign exchange rate between the USS and the Euro changes from US$1-EUR2.50 to US$1-EUR1.25·The USS would be said to be: Rising (strengthening) relative to the Euro. a. b. Falling (weakening) relative to the Euro. The change in the exchange rate would have no effect on the relative strength of the two currencies in International trade. There is not enough information to make that determination. d. 20. In the scenario described above, a. US exports to the UK would become less expensive in the UK. b. US exports to the UK would become more expensive in the UK. c. The change in the exchange rate would have no effect on the cost of goods between the two countries. d·There is not enough information to make that determination.
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