Unit 5 - International Trade

As the economy globalizes, what happens to quality control?

• Quality control improves because more people evaluate the products. 
• Americans give up some control over the quality of goods produced
• Fewer products have quality problems
• Countries cooperate more on quality control.

Which of the following strategies involves increasing the supply of a product so much that its prices drops severely, forcing similar products out of the market?

• specialization
• dumping
• setting quotas
• trade restrictions

Which one of the following statements best explains why globalization began?

• Globalization began because Americans discovered lower labor costs in Mexico for American farm products.
• Globalization began due to a mass immigration movement directly after WWII. 
• Globalization began because the U.S. shared military forces, technology, and resources in response to threats by the Soviet Union after WWII. 
• Globalization began because the auto industry saw the advantages of using foreign made parts in American cars

Dumping is sending production to another country to keep production costs low

• True
• False

The value that one currency has compared to another currency is called exchange rate

• True
• False

What is absolute advantage of trade?

• Two countries produce distinctively different goods.
• Two countries produce comparable goods.
• A poorer country is more efficient at producing something than a rich country.
• One country produces more of everything than another country.

What determines the value of a currency?

• Federal Reserve Board
• Congress
• The Market - Supply and Demand
• Council of Economics Advisers 

Which one of the following is NOT considered a trade restriction?

• unfavorable exchange rate
• tariff
• Import quotas
•  CPI 

When the U.S. and Western Europe joined together at the end of WWII to protect their economic and military interests, what concept were they demonstrating?

• Independency
• Interdependency
• Co-dependcy
• Depends

How has globalizing the economy affected US auto makers?

•  It has led to lost jobs for US workers
• It has kept jobs in America and Detroit. 
• It has increased the number of good-paying jobs.
•  It has contributed to increase GDP in the auto industry.