In spite of bitter relations, U.S. and Iraq continue to trade. (Graph Exercise).

Today's tensions between the United States and Iraq are only the latest chapter in a long period of frigid relations between the two countries. The low point came in 1991, when a U.S.-led coalition of countries went to war to drive Iraq out of Kuwait, which it had invaded in 1990.

Following the war, the United Nations imposed trade sanctions on Iraq. But in 1996, those sanctions were eased so Iraq could buy food and medicine for its people. With the sanctions eased, the U.S. and Iraq resumed trade. U.S. exports to Iraq consist mainly of machinery, medical instruments, motor vehicles, and tools. U.S. imports from Iraq consist almost entirely of crude oil and other petroleum products. In mid-2002, the U.S. was importing 167,000 barrels of oil a day from Iraq. These graphs show the value of U.S. exports to and imports from Iraq between 1995 and 2001. Use the data in the graphs to answer the questions below.

Source, U.S. Department of Commerce, International Trade Administration.

1. In which year did U.S. exports to Iraq rise by slightly more than 2,500 percent? --

2. What was the United States trade deficit with Iraq--the difference between the value of U.S. exports to Iraq and the value of imports from Iraq--in 19987 Approximately (a) $100 million; (b) $900 million; (c) $3 billion; (d) $4 billion.

3. Suppose machinery and motor vehicles accounted for 75 percent of the value of U.S. exports to Iraq in 1998. About how much would U.S. exporters of other products have earned from their sales to Iraq in that year? About (a) $15 million; (b) $26 million; (c) $40 million; (d) $50 million.

4. Approximately how much money did Americans spend on imports from Iraq from the start of 1998 through 2000? About (a) $3 billion; (b) $6 billion; (c) $7 billion; (d) $11 billion.

5. The graph shows that Iraq has consistently run a trade surplus with the U.S., meaning that in each year shown it has earned more from its exports to the U.S. thank has spent on imports from the U.S. In which year did the value of Iraqi sales to the U.S. increase by exactly $3 billion? --

6. Suppose data for 2002 show a 50 percent drop in the value of Iraq's exports to the U.S. About how much will Americans have spent on these imports in 2002? (a) $700 million; (b) $1 billion; (c) $3 billion; (d) $4 billion.

ANSWER KEY:

1. 1997. 2. 900 million. 3. (b) $26 million 4. (d) $11 billion. 5. 1999. 6. (c) $3 billion.