Ever since _____________ published The Wealth of Nations in 1776, the vast majority of economists have accepted the proposition that free trade among nations improves overall economic welfare.

• Adam Smith

• Karl Marx

• Max Weber

• Paul Adams

__________ is defined as the absence of tariffs, quotas, or other governmental impediments to international

trade, allows each country to specialize in the goods it can produce cheaply and efficiently relative to other countries.

• Free Trade

• Tariff

• Tax

• Import

____________________ is when reductions made independently and without reciprocal action by other countries.

The best possible outcome of trade negotiations is a _________________that includes all major trading countries. Then, free trade is widened to allow many participants to achieve the greatest possible gains from trade.

After World War II, the United States helped found the ____________________________________ which quickly became the world’s most important multilateral trade arrangement.

◦Since the GATT began in________ average tariffs set by industrial countries have fallen from about 40 percent to about 5 percent today. These tariff reductions helped promote the tremendous expansion of world trade after World War II and the concomitant rise in real per capita incomes among developed and developing nations alike.

• 1947

• 1950

• 1952

• 1946

In __________, the GATT became the World Trade Organization (WTO), which now has more than 140 member countries.

• 1947

• 1995

• 1952

• 1946

◦The__________ is now the forum for members to negotiate reductions in trade barriers

A _________is a group of countries that eliminate all tariffs on trade with each other but retain autonomy in determining their tariffs with nonmembers.

• Custom Union

• free-trade area

• Free Trade

• Trade agreement

A _________ is a tax imposed by one country on the goods and services imported from another country

• Custom Union

• free-trade area

• tariff

• Trade agreement