Chapter 3

Domestic business is the making, buying, and selling of goods and services within a country.

• True

• False

_____ business refers to business activities needed for creating, shipping, and selling goods and services across national borders.

A(n) _____ advantage is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.

• comparative

• infinite

• absolute

• colossal

A(n) _____ advantage exists when a country can produce a good or service at a lower cost than other countries.

• comparative

• infinite

• absolute

• colossal

_____ are items bought from other countries

_____ are goods and services sold to other countries.

A trade deficit is when a country exports more than it imports.

• True

• False

A trade surplus is when a country exports more than it imports.

• True

• False

A positive balance of payments occurs when a nation receives more money in a year than it pays out.

• True

• False

A negative balance of payments occurs when a nation sends out more money than it brings in.

• True

• False