4.3 Globalization & International Trade

Multiple Choice

Which of the following is NOT a characteristic of globalization?

• Free flow of goods, services, capital

• Reduced trade barriers

• Isolation of economies

• Technological connectivity

Fill in the Blanks

According to Ricardo, countries should specialize in producing goods where they have the lowest

cost.

Multiple Select

Which of the following statements about Adam Smith's and David Ricardo's trade theories are correct?

• Adam Smith believed in absolute advantage.

• David Ricardo introduced the concept of comparative advantage.

• Both economists were from the same country.

• Ricardo's theory allows for mutual benefit even if one country is better at producing everything.

Multiple Choice

Which of the following is a benefit of specialization according to the theories discussed?

• Higher efficiency and productivity

• Increased trade barriers

• Decreased variety of goods

• Economic isolation

Multiple Choice

Which of the following is a benefit of international trade for consumers?

• Lower prices

• Larger markets

• Economies of scale

• Access to resources and technology

Fill in the Blanks

Fill in the blank: Tariffs are taxes on

goods.

Multiple Choice

What is the main purpose of quotas as a trade barrier?

• To limit the quantity of imports

• To raise prices for consumers

• To provide access to technology

• To improve economic accounts

Open Ended

Describe a scenario in which a country might impose an embargo and explain the likely reasons behind it.

Multiple Select

Which of the following are arguments commonly made in favor of trade barriers (protectionism)?

• National defense

• Lower prices for consumers

• Balance of payments

• National pride

Multiple Select

Select all the factors that decrease the demand for a currency.

• Economic recession or uncertainty

• Lower interest rates

• Political stability

• High inflation

Multiple Choice

Which of the following is NOT a main goal of the World Trade Organization (WTO)?

• Reduce trade barriers worldwide

• Ensure trade flows smoothly and predictably

• Settle trade disputes between countries

• Promote military alliances between countries

Multiple Select

Which of the following are key features of the USMCA regional trade agreement?

• Eliminates most tariffs between the three countries

• Updated rules for digital trade and e-commerce

• Stronger labor and environmental protections

• Requires all trade to be conducted in US dollars

Multiple Choice

Which of the following is a reason why trade barriers exist between countries?

• To protect domestic industries

• To encourage free trade

• To increase globalization

• To reduce economic growth

Open Ended

How does globalization impact international trade and the economy of a country?