1. Distinguish between an absolute advantage and a comparative advantage. Cite an example of a country that has an absolute advantage and one with a comparative advantage.
Absolute advantage is when a monopoly exists in a country when it is the only source and product of an item. Meanwhile, a comparative advantage is when a country can supply products more efficiently and at a lower cost than it can produce other items. South Africa has an absolute advantage because of its diamonds. The United States has a comparative advantage because of the many products we produce.
3. What effect does devaluation have on a nation's currency? Can you think of a country that has devaluated or revaluated its currency? What have been the results?Devaluation decreases the value of currency in relation to other currencies. Mexico is a country that has devalued their currency. The result of this is to make things less expensive.
English: An example of absolute advantage.
English: Comparative advantage Dansk: Komparativfo...
English: comparative advantage in economics4. How do political issues affect international business?Political issues affect international business by it helps to sell products overseas.
5. What is an import tariff? A quota? Dumping? How might a country use import tariffs and quotas to control its balance of trade and payments? Why can dumping result in the imposition of tariffs and quotas?An import tariff is a tax made by the nation on goods imported into the country. A quota limits the amount of products that can be imported into a country. Dumping is a country selling products at less than what it costs to produce them. A country uses import tariffs to protect domestic products by raising the price of imported ones. A country uses quotas by voluntary agreement or by government decree. Dumping can result in the imposition of tariffs and quotas because it permits quick entry into the market...