IB International Economics SWC

The ability of one person or nation to produce more of a good than another person or nation

• Comparative Advantage
• Absolute advantage
• exports
• protectionism 

The use of trade barriers to protect a nation’s industries from foreign competition

• Balance of trade
• NAFTA
• Quotas
• Protectionism 

Exports minus imports or how many goods a county exports versus imports

• Exports
• Subsidy
• Quotas
• Balance of Trade

A regional trade organization made up of European nations

• NAFTA
• EU
• ASEAN
• CARICOM

Limit of the amount of a good that can be imported

• Subsidy
• Quota
• Exports
• Appreciation 

A good that is sent to another country for sale

• export
• import
• quota
• subsidy 

Government payments to a local supplier to reduce the supplier costs. This helps local businesses survive because it is getting direct aid from the government

• Balance of trade
• protectionism
• exchange rate
• subsidy

What happens when a nation’s currency depreciates?

• Its products become more expensive to other nations
• Its products become cheaper to other nations and exports may increases
• Nothing
• It halts all trade

Suppose the US decreases the tariff on imported beef which makes foreign beef cheaper than US beef. What would the consequences be?

• There would be an increase in the number of imported beef and the number of beef produced in the US
• There would be a decrease in the number of imported beef and the number of beef produced in the US
• There would be an increase in the number of imported beef and a decrease in the number of beef produced in the US
• There would be a decrease in the number of imported beef and an increase in the number of beef produced in the US

Those in favor of protectionist trade policies would most likely

• Believe that restrictions harm consumers
• Argue in support of free trade
• Support a massive reduction in tariffs
• Cite the need to preserve domestic industries and jobs