A rise in the real exchange rate represents an increase in the ...

[littleanan]

A rise in the real exchange rate represents an increase in the purchasing power of the home currency.
 
  Indicate whether the statement is true or false

Question 2

Describe the potential benefits and the potential costs to global trade of the tremendous growth in regional trade agreements.
 
  What will be an ideal response?

[JCABRERA33]

Answer to Question 1

FALSE

Answer to Question 2

A regional trade agreement creates preferential treatment for nations that are participants, which violates the idea of MFN status in multilateral agreements, where nations agree to treat all participants the same. The WTO recognizes that regional agreements destroy some opportunities for trade by making non-members face higher barriers than members of the regional agreement. But it believes that they create more trade than they divert, and the regional agreements allow nations to try out arrangements that may later be adopted more broadly.