What is the result of nations specializing in the production of goods?

• decreasing prices

• economic efficiency

• self-sufficiency

• incentive to trade

A nation can have an absolute advantage without having a comparative advantage in production.

• True

• False

What is the difference between nations exports and imports?

• Balance of Trade

• Real GDP

• Comparative Advantage

• Absolute Advantage

Measures the price of one nation's currency in terms of another nation's currency

• interest rates

• exchange rates

• discount rates

• inflation rates

Who benefits from the depreciation of the Japanese yen relative to the Euro?

• European consumers of European Goods

• Japanese consumers of Japanese Goods

• European consumers of Japanese Goods

Which is NOT an example of a trade barrier?

• Tariff

• NAFTA

• Embargo

• Quota

What argument for protection believes that new or emerging industries should be protected.

• National Defense

• Protecting domestic jobs

• Infant Industry

• Keeping money at Home

When the government places a tax on an imported good to protect a domestic good.

• Protective tariff

• Subsidy

• Comparative Advantage

• Quota

Which is NOT a benefit to open trade?

• lower prices

• more consumer choice

• increased tariffs

• more markets for business

when the dollar strengthens it pushes the balance of trade toward a

• Surplus

• Shortage

• deficit

• equilibrium