1. Explain how a weakening dollar makes Chinese goods more expensive in the U.S.

As the dollar weakens on international exchange markets it takes more dollars to buy a Chinese yuan. This is referred to as a depreciating dollar. If the dollar decreases in value relative to the other currency, it will buy fewer of the foreign country's exports.

2. Define protectionism.

Protectionism is the term given to groups such as governments, labor unions and some corporate entities who desire to protect American business from foreign competition. In order to do so they impose protective tariffs, which make foreign goods more expensive in domestic markets, or they might use quotas which specifies the maximum amount of a foreign good that can be imported into the county during a specific period of time.

Multiple Choice/True False Questions