Question 1 (Essay Worth 15 points)

Exchange Rates | Year | U.S.
Dollar | South Korean
Won | Malaysian
Ringgits | Indonesian
Rupiahs | 2008 | 1 | 9,046 | 3.49 | 9,022 | 2009 | 1 | 9,046 | 3.78 | 9,087 | 2010 | 1 | 8,995 | 3.65 | 9,144 |

a. Given the change in the value of the dollar between 2008 and 2009, as indicated in the table above, describe the effects this will have on United States tourism in each of these countries. b. Explain what impact the change in the value of the dollar between 2008 and 2009 will have on the United States current account.

Question 2 (Essay Worth 15 points)

Suppose the United States decides to impose a tariff on all wood products coming into the nation. a. Using a supply and demand market graph, show and explain how the tariff will affect the market for wood products in the U.S. b. Who are the winners and losers as a result of the tariff on wood products? Consider foreign and domestic producers, the U.S. government, and consumers in your answer. c. Explain one of the arguments for the imposition of the tariff on wood products. d. Name two (2) negative costs that will result from the tariff.

Question 3 (Multiple Choice Worth 2 points)
The balance of payments includes all of the following except transfer payments for welfare. goods and services sold overseas. foreign purchases of domestic assets. imported goods and services. capital goods purchased by foreigners.

Question 4 (Multiple Choice Worth 2 points)
Which of the following would increase the U.S. financial account? a factory site purchased in Ireland by an American businessman. a sailboat purchased by a wealthy Japanese entrepreneur.
$500 in interest earned on foreign stocks. the purchase of $500 of American bonds by a German investor. the purchase of an American car by a diplomat living in Jamaica.