Finance Paper

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International Trade and Finance Speech ECO/372 November 08, 2012 Frank Vigil International Trade and Finance Speech What happens when there is a surplus of imports brought into the U.S.? Cite a specific example of a product with an import surplus, and the impact that has on the U.S. businesses and consumers involved. Anytime there is a surplus of specifics imports brought into the U.S., American companies suffer because of enlarged foreign competition. A specific product that is an import surplus is crude oil. According to the Wall Street Journal’s 2011 report, they predicted that United States would encounter an oil surplus. The reason the U.S. had a surplus of oil was that the U.S. continued to import as much oil as…show more content…
If the scales should go out of balance then trade and international relations are damaged. If this happens the trading partners will counter with tariffs and quotas of their own. (Colander, 2010) What are foreign exchange rates? How are they determined? Foreign exchange rates are best described as simply the price of a country’s money expressed in another country’s money. In simple words, it is the rate at which a currency can be swapped for another. An example of determining foreign exchange rates is by substituting goods for currencies. Another example is the yuan-dollar exchange will depend on how well the demand and supply moves. When the demand for dollars in China climbs and supply does not go up correspondingly, each dollar will cost more yuan to buy. (Colander, 2010) Why doesn’t the U.S. simply restrict all goods coming in from China? Why can’t the U.S. just minimize the amount of imports coming in from all other countries? The United States can’t simply restrict all goods coming in from China because it would create a trade war that will probably damage each others trade. If this happens they will both impose high tariffs and quota restrictions on each other. The U.S. can’t minimize the amount of imports coming from

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