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Currency Values and Tariffs

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A country eliminates all tariffs. Would you expect that the value of its currency to rise or fall? Explain your answer.

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Eliminating tariffs on imports would reduce their cost to consumers, and cause demand imports to increase. When the country imports goods, it must sell its currency in ...

Solution Summary

The currency values and tariffs are determined.

$2.19
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1. Discuss the following trade controls: Tariffs, subsidies, and quotas. How do these trade controls affect the relationship of trading partners and what is their value in international business.

2. What is a fixed exchange rate and what is a flexible exchange rate? China currently has a fixed exchange rate pegged to the US Dollar. How would a flexible exchange rate help China's global business?

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