timer Asked: May 9th, 2018
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Question description

For this discussion, you will examine trade barriers between the United States and a specific market, and their impact on PPP, the IFE, and currency values.

First, review the required text readings and the additional resources on free trade agreements and the trade relationship between U.S. and foreign markets, PPP, and the IFE. There are some trade barriers and also trade agreements governing the movements of goods and services among U.S. and other markets. From our theory, we have learned that changes in international prices are impacted by inflation differences and their impacts on exchange rates. Both PPP and the IFE are impacted by the changes in inflation. Inflation, in turn, is impacted by trade barriers.

Next, select a specific international market for your discussion. (Hint: Think in terms of your final project. You can do part of your research in this discussion if you use the international market you have selected for expansion.)

In your initial post, address the following:

  • What market have you selected and what are some of the trade barriers (identify 2 to 4) between the United States and your selected market? For market selection, identify the country only by name. You do not need to provide an overview of the country.
  • If these trade barriers were removed, how would it impact the PPP and the IFE? Would they be more likely to hold? Please explain.
  • What are the impacts of trade barriers on currency values? Do trade barriers impact currency valuations? Briefly explain.

Please focus on every questions.

Tutor Answer

School: Purdue University



Discussion: Trade Barriers
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In international trade, the changes are likely to happen as a result of the inflation, and
they may consequently affect the rate of foreign currency exchange. In essence, the
differences in inflation affect the demand and supply of the currency in the market (Soteros,
2016). This effect on the currency rate is likely to occur in a country allows free trade and the
fluctuation of the currency is allowed to happen without any sort of government intervention.
The first case is Hungary and the USA trade. The first barrier is prohibition and
restriction of the imports of some goods in Hungary. For instance, in the trade between the
two countries, most of the products are allowed to be im...

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Thanks, good work

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