An increase in real interest rates and a decrease in inflation are both factors that will increase the value of the dollar in the foreign exchange market. As nominal and real interest rates decline, the value of the dollar declines. As a result, exports are more competitive internationally and imports are more expensive. This increase in net exports will reinforce the impact of counter cyclical monetary policy by increasing aggregate demand. Alpha can obtain a bottle of wine for one yard of cloth.
Beta has an opportunity cost of a little less than one-half of a yard of cloth.
The total benefits to domestic car companies from tariffs or quotas are less then the loss to consumers. Dumping implies that the foreign country is importing steel at a price lower than their domestic costs of production. A major function of the World Bank is to make loans to countries to help them undertake development projects. The other choices are not functions of the World Bank. Examples include the arrangement that limits the import of textiles and clothing into the United States.