Directions:

(a) Describe economic terms and concepts in question.

(b) Describe your reasoning leading from concepts in question to the final answer.

(c) Write full sentences and use double spacing between paragraphs.

(d) Edit your work for sentence structure, spelling and appropriate formatting of paragraphs.

Your work should consist of at least 3 separate sections of text: 

1) description of economic terms and concepts,

2) your reasoning and 

3) concluding paragraph which states the final  answer.

1. How might protective tariffs reduce both the imports and the exports of the nation that levies tariffs? In what way do foreign firms that "dump" their products onto the U.S. market in effect provide bargains to American consumers? How might the import competition lead to quality improvements and cost reductions by American firms?

2. Explain: "U.S." exports earn supplies of foreign currencies that Americans can use to finance imports." Indicate whether each of the following creates a demand for or a supply of European euros in foreign exchange markets:

a. A U.S. airline firm purchases several Airbus planes assembled in France.

b. A German automobile firm decides to build an assemble plant in South Carolina

c. A U.S. college student decides to spend a year studying at the Sorbonne in Paris.

d. An Italian manufacturer ships machinery from one Italian port to another on a Liberian freighter.

e. The U.S. economy grows faster than the French economy.

f.  AU.S. government bond held by a Spanish citizen matures, and the loan amount is paid back to that person.

g. It is widely expected that the euro will depreciate in the near future.