International ECON Review

Front

Countries will export goods and services that they can produce at lower costs. This is called —

Back

comparative advantage

Front

Which term is defined as the difference between the value of a nation’s imports and the value of its exports?

Back

balance of trade

Front

Based on the scenario, what trade relationship would most benefit both countries? Country A can produce enough wool to meet its needs and also produces grain. Country B cannot produce enough wool to meet its needs, but Country B can produce grain more efficiently than Country A.

Back

Country A could specialize in wool to trade with Country B, who could focus on producing grain.

Front

Which best describes a purpose of international trade? Options: Nations can obtain enough workers needed to produce goods. Nations can obtain goods they are unable to produce on their own. Nations can ensure they will have enough funds to purchase goods. Nations can ensure that goods they produce will sell for high prices.

Back

Nations can obtain goods they are unable to produce on their own.

Front

Which is an example of how nations depend upon each other for things they need?

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The United States imports oil and exports aircraft.

Front

How does Japan maintain its wealth with limited natural resources?

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Japan trades technology to get the resources it needs.

Front

What would be the most direct effect on trade if the U.S. government subsidized paper companies?

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U.S. production of paper would increase.

Front

Which factor is the basis for the theory of comparative advantage? Options: capital, investment, rationing, specialization

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specialization

Front

What was one purpose of the North American Free Trade Agreement (NAFTA)?

Back

the reduction of tariffs on goods traded between adjoining countries

Front

During periods of extremely high crop yields, the U. S. government pays farmers to withhold their products from the market. What is the purpose of this economic subsidy?

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to keep food prices more stable