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U.S. Trade in Goods

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1.Travel to France with $3000, exchange for Euros, spend 1080 Euros in France. Go to Russia spend 2500 rubles, go to Britain spend 399 pds, return to US. How many dollars did you spend.?

2.When the U.S. imposes a tariff or quota on imports, who pays it? Who benefits from a tariff or quota? What is the impact of a trade surplus? What is the impact of a trade deficit? How do politics affect international trade?

What is the impact of a trade surplus? What is the impact of a trade deficit? How do politics affect international trade?

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Solution Summary

Impact of a trade deficit and also political effects are noted in terms of global trade.

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1. Travel to France with $3000, exchange for Euros, spend 1080 Euros in France. Go to Russia spend 2500 rubles, go to Britain spend 399 pounds, return to US. How many dollars did you spend?

In order to calculate the dollars we spent we need to convert currencies.
(1 USD= 0.7881 Euro= 0.5324 GBP = 26.814 Ruble
(Source: Yahoo finance currency converter on 10.05.06 http://finance.yahoo.com/currency?u )

$3000 = 3000*0.7881= 2364.3 Euros
We spent 1080 Euros in France
2364.3-1080=1284.3 Euro left

Now let's convert euro to ruble
1 Euro =34.03 ruble
1284.3*34.03= 43704.729 Ruble
We spent 2500 rubles in Russia
43704.729-2500=41204.729 ruble left

Now we need to convert ruble to GBP
1 ruble = 0.01985 GBP
41204.729*0.01985= 817.9 GBP
We spent 399 ...

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