Economic Unit 4 Review

A nation imports $5.3 billion and exports $5.2 billion. That nation definitely has what?

• A trade deficit
• A trade surplus
• A negative balance of payments30 characters remaining
• A positive balance of payments

Which nation has the absolute advantage in producing cars?

• Country A
• Country B

In the table, the US dollar is worth approximately how many Japanese Yen (JPY)?

• .0109
• .8619
• 92.1232
• 1

What does it mean if the dollar goes down in value?

• Americans can buy more foreign goods.
• Americans can buy less foreign goods.
• the trade deficit increases.
• Americans travel more.

The US gov't puts a 20% tax on all candy from Europe. This is an example of a ___.

• Protectionism
• Embargo
• Tariff
• Quota

Which would a supporter of free trade most likely support?

• a "Buy American" program
• Job protection legislation
• increasing quotas
• reducing tariffs

A country's currency appreciates, this means their imports ___ & their exports _____.

• increase; increase
• increase; decrease
• decrease; increase
• decrease; decrease

One of the PRIMARY reasons that trade between nations takes place is because

• any nation can be self-sufficient.
• resources are evenly distributed.
• nations use absolute advantage to monopolize markets.
• nations want to make themeselves better off.

The US can produce corn more efficiently than Laos. The US has a ______ in producing corn.

• absolute advantage
• comparative advantage
• free trade
• protectionism

Non-supporters of free trade agreements such as NAFTA would contend that such agreements

• increase government control of a nation's economy.
• limit the growth of an economy and prevents inflation.
• take jobs away from America.
• provide much needed jobs in developing countries.