1. Explain the difference between an open economy and a closed economy.

2. Explain the theory of comparative advantage, distinguishing between comparative advantage and absolute advantage in your answer.

3. (a) Discuss the benefits to countries of increased free trade.

(b) Explain who may not benefit from free trade.

4.Does foreign investment benefit the recipient country? Explain.

5. Assume that you have $100 Australian dollars. Use the internet to find out how much of the following currencies you would get if you exchanged your $100 Australian dollars for these currencies.

(i)US dollar

(ii)Singapore dollar

(iii) Euro

(iv) Yen

6. (a) Briefly outline the main trade barriers and forms of international trade protection. (b) Question 4.7, Chapter 19, page 664, Hubbard et. al., Essentials of Economics, 4th ed..

7. Read the Opening Case to Chapter 19 on page 637, Hubbard et. al., Essentials of Economics, 4th ed.to help you explain which industries were affected unfavourably by tariffs on imported motor vehicles in Australia.

8. Question 5.6, Chapter 19, page 666, Hubbard et. al, Essentials of Economics, 4th ed..

9. (a)Explain the difference between a 'floating exchange rate' and a 'fixed exchange rate'. Illustrate an exchange rate appreciationon a diagram.

(b)Read the Opening Case of Chapter 20 on pages 668-669 of Hubbard et. al, Essentials of Economics, 4th ed., and explain why the tertiary education sector in Australia is affected by exchange rate changes.Which other industries are most affected by changes in the exchange rate?