38a, b, c: Voluntary trade in Africa

Why is it important for nations to have a system to convert from one currency to another?

• Converting currency makes it possible to buy and sell goods between countries with different types of money.

• The dollar is the most valuable currency in the world.

• Converting currencies makes goods cost less so more people are likely to trade.

• It is not important because international trade can now occur with an exchange rate.

Why does specialization make trade between countries easier?

• There will always be a steady supply of goods on the market so trade is not needed.

• Countries can produce what they make best and trade with others for what they need.

• A country’s economy will never go through a difficult time if they specialize in a good.

• The competition between countries will not exist without interdependance.

Scenario: The US refuses to trade with any countries that support terrorism. What trade barrier is this?

• Tariff
• Quota
• Embargo
• Physical trade barrier

Which African country specializes in tea, fresh cut flowers and buds, coffee, petroleum products, fish, and cement?

• Nigeria

• South Africa

• Kenya

• Sudan

What are sanctions?

• financial penalties applied by one or more countries against a targeted country, usually a punishment

• when the government of a country gives money to certain businesses so they can continue to compete with imports from other countries

• a specific limit placed on the number of imports that may enter a country

• stopping trade with another country

What is a subsidy?

• a tax on imports

• when the government of a country gives money to certain businesses so they can continue to compete with imports from other countries

• a specific limit placed on the number of imports that may enter a country

• stopping trade with another country

Which country specializes in petroleum (oil), petroleum products, cocoa, and rubber?

• Kenya

• Nigeria

• South Africa

• Egypt

How does voluntary trade help the economy

• Voluntary trade mean prices will always be low.

• Voluntary trade only works when tariffs are in place.

• This sort of trade involves many government regulations

• It encourages specialization and usually means more profit.

Why did a number of the countries of the United Nations have an embargo on South Africa?

• South Africa refused to take part in international trade.

• They wanted South Africa to end its system of apartheid.

• Some were hoping for better oil deals from the South African government.

• They wanted South Africa to lower the world price of gold and diamonds.

Which African country specializes in diamonds, platinum, gold, uranium, and machinery?

• Nigeria

• South Africa

• Kenya

• Sudan