Unit 4: International Trade

Tariffs and quotas are designed to

• promote third-world development

• decrease prices consumers pay for goods

• protect domestic industry

• increase trade deficits

Revenue tariffs are levied to

• increase imports

• lower exports

• raise money

• protect domestic

  producers

A persistent trade deficit causes

• unemployment to

  increase in import industries

• unemployment to

  increase in export industries

• the dollar to grow

  stronger

• lower prices on

  imported goods

The U.S. has the largest trade deficit in merchandise with which area of the world shown in the table?

• Canada

• Australia, New Zealand, South Africa

• Japan

• OPEC

With which area or areas shown in the table does the U.S. have a positive trade balance in merchandise?

• OPEC

• Canada

• Western Europe

• Australia, New Zealand, South Africa

Based on the table, the European Union has its largest trade surplus with which region of the world?

• North America

• Asia

• Russia and Eastern

  Europe

• Latin America

Based on the table, what was the value of all the products that the European Union bought from Latin America?

• $42.4 million

• $11 million

• $53.4 million

• $63.2 million

“It’s been 10 long years since NAFTA was implemented, and the result has been the bleeding of jobs,” [Congressman Ted] Strickland said. . . . In my judgment, we have a trade policy that does not protect American jobs or American companies. . . . And the beneficiaries . . . are the multinational corporations [whose] only concern is how to increase the bottom line. . . .”

“These companies have gone down there and built modern factories,” Strickland said. “They pay pathetic wages . . . and within sight of those factories, people who work in those factories [are] living in the most pathetic squalor. . . .The jobs going to Mexico haven’t really benefited the Mexican workers. . . .” (Source: Adapted from Jeff Hibbs, “Strickland, Democrats take aim on NAFTA,” Wilmington News Journal, November 14, 2003.)

According to the passage, Congressman Strickland believes that NAFTA has affected American workers in what way?

• NAFTA created jobs

  for them in Mexico

• NAFTA cost them their

  jobs

• NAFTA created higher

  wage jobs for them in the United States

• NAFTA caused their

  wages to decline

A protective tariff is used to

• give less-efficient domestic industries an advantage

• expand trade

• increase revenue

• gain a comparative advantage

The North American Free Trade Agreement proposed free trade between the United States and

• Central American

  countries

• Brazil and Mexico

• the European Union

• Canada and Mexico