Unit 6 - International Trade, Economics Systems

Economist believe which of the following are benefits of international trade:

• there can be increased consumption for all.

• global production will be increased.

• world resources will be used more efficiently.

• all of these are true.

Comparative advantage explains why a nation will benefit from trade when:

• it exports more than it imports.

• its trading partners are experiencing offsetting losses.

• it exports goods for which it is a high-opportunity cost producer, while importing those for which it is a low-opportunity cost producer.

• it exports goods for which it is a low-opportunity cost producer, while importing those for which it is a high-opportunity cost producer.

A country that can produce a good using fewer resources than another country has a(n):

• lower opportunity cost of producing the good than another country.

• absolute advantage.

• specialization in the production of the good.

• all of these.

Embargos:

• ban trade with other countries

• generate tax revenues for that country

• hurt domestic producers

• lower prices of goods

A tariff can be defined as a:

• tax on imports.

• tax on exports.

• legal limit on imports.

• legal limit on exports.

The principal objective of WTO is to:

• reduce the level of all tariffs and encourage trade

• to increase tariffs on all imported goods

• prevent the trading of services across nations' borders.

• encourage countries to establish quotas.

A restriction on the quantity of a good that can be imported into a country is a(n):

• tariff.

• quota.

• embargo.

• restricted exchange rate.

USMCA is a trade agreement between which of the following countries?

• the United States, Cuba, and Brazil.

• the United States, Canada, and Mexico.

• the United States, Puerto Rico, and Cuba.

• Brazil, Bolivia, Peru, and Columbia.

The account which records a nation's foreign economic transactions is called the:

• Trade Account.

• T account.

• Exchange Market.

• Balance of Payments.

An exchange rate is the number of units of:

• a nation's money that is equal to one unit of another nation's money.

• a nation's output that is equal to one unit of another nation's output.

• gold backing a nation's money.

• none of these.