What explains an increase in international trade and finance?

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marshmallowx
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In the 1950s, imports and exports of goods and services constituted roughly 4% to 5% of US GDP. In recent years, exports have accounted for approximately 12% of GDP, while imports have more than tripled to over 15% of GDP.

Which of the following help to explain the increase in international trade and finance since the '50s? Select any that apply.

A. An increasing number of affordable international flights
B. Change in exchange rates
C. International trade agreements that lower tariffs and import quotas
D. The widespread use of the Internet to conduct business


I think the answer is A, C, D but I am not too sure. Can anyone confirm or disconfirm this? A is the one I am iffy about.
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.ACS.
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(Original post by marshmallowx)
In the 1950s, imports and exports of goods and services constituted roughly 4% to 5% of US GDP. In recent years, exports have accounted for approximately 12% of GDP, while imports have more than tripled to over 15% of GDP.

Which of the following help to explain the increase in international trade and finance since the '50s? Select any that apply.

A. An increasing number of affordable international flights
B. Change in exchange rates
C. International trade agreements that lower tariffs and import quotas
D. The widespread use of the Internet to conduct business


I think the answer is A, C, D but I am not too sure. Can anyone confirm or disconfirm this? A is the one I am iffy about.

Well, in terms of (A), does international flights constitute only passenger flights or also freight flights whereby packages, etc. are transported via aeroplane? When you send packages to France from the UK, it goes via air not sea.

(C) and (D) are obvious ones.

(B) is less obvious, but it depends on what they mean by a change in exchange rates. For example, exchange rate stability can help with exports/imports, and when the GBP becomes strong relative to the US, it helps our imports but weakens our exports.

Further, the increased usage of forward rates as opposed to spot rates has helped international trade immensely. (Forward rates now account for 2/3 of all exchange rate contracts.)
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Zenomorph
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BCD. Not A

B because an changes in a country's exchange rate will have an effect on the BOP and thus trade and finance

CD are more obvious but A is not so relevant as the bulk of trade is conducted via shipping and services don't require transport per se especially with the internet.
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