Free Trade & Foreign Exchange

Anonymous
timer Asked: Jun 17th, 2014
account_balance_wallet $5

Question Description

Explain the difference between absolute and comparative advantage.Explain how exchange rates work. List some exchange rates between the U.S. and some other countries.What are the pros and cons of having a weak dollar? ORIGINAL ANSWERS ARE THE BEST!

Tutor Answer

HKPJ
School: UCLA

Comparative advantage at producing something if it can be produce it at lower cost than anyone else. Absolute advantage refers to the ability of a individual, organization and/or country  to produce more  goods or services than competitors. The main difference is a joint venturing partnership. 

An exchange rate is the amount one currency is worth in another at a given time and affected by international exchange markets.

1.00 Euro Rates table

Top 10 Jun 17, 2014 18:16 UTC
Euro 1.00 EUR inv. 1.00 EUR
US Dollar 1.354018 0.738542
British Pound 0.798584 1.252216
Indian Rupee 81.701445 0.012240
Australian Dollar 1.450808 0.689271
Canadian Dollar 1.471265 0.679687
Emirati Dirham 4.973581 0.201062
Swiss Franc 1.218568 0.820635
Chinese Yuan Renminbi 8.381159 0.119315
Malaysian Ringgit 4.362105 0.229247
New Zealand Dollar 1.565751 0.638671
this graph is from forex exchange

Weakening Dollar

Advantages

U.S. firms find it easier to sell goods in foreign markets

U.S. firms find less competitive pressure to keep prices low

More foreign tourists can afford to visit the U.S.

U.S. capital markets become more attractive to foreign investors

Disadvantages

Consumers face higher prices on foreign products/services

Higher prices on foreign products contribute to higher cost-of-living

U.S. consumers find traveling abroad more costly

Harder for U.S. firms and investors to expand into foreign markets




flag Report DMCA
Review

Anonymous
Thanks, good work

Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors