The president signing a trade agreement with China is an example of:

• A. a market-determined exchange rate
• B. the law of comparative advantage
• C. government intervention in international trade
• D. consumer preference for imported goods

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the context of the problem, which involves international trade and exchange rates.
2. Step 2: Review the definitions of each option: a market-determined exchange rate is set by supply and demand in foreign exchange markets; the law of comparative advantage explains how countries benefit from specializing in goods they produce relatively more efficiently; government intervention in international trade involves actions by governments to influence trade flows, such as trade agreements, tariffs, or quotas; consumer preference for imported goods relates to demand for foreign products.
3. Step 3: Identify that the president signing a trade agreement is an action taken by the government to influence trade policies between countries.
4. Step 4: Recognize that this action is a clear example of government intervention in international trade, as it is a deliberate policy decision rather than a market-driven outcome or consumer behavior.
5. Step 5: Conclude that the correct classification of the president signing a trade agreement is government intervention in international trade.