Global Trade and Trade Policy

How are conducting diplomacy and conducting trade similar?

• They both are strategies to combat terrorism

• They are both techniques of cybersecurity

• They are both tools of foreign policy

• They are both ways to better equip the military

Three fundamental questions of economics:

What to produce?

How to produce?

and....

• For whom to produce?

• Where to produce

• How much to produce?

• When to produce?

Which form of competition drives production decisions in a market-based economy?

• Competition among consumers to buy goods

• Competition between businesses to make money

• Competition between governments for territory

• Competition among producers for natural resources

Which is central to the operations of a market-based economy?

• the allocation decisions of the government

• the basic laws of supply and demand

• the productivity of subsistence farmers

• the labor force and natural resources of the country

Which is central to the operations of a command economy?

• the productivity of subsistence farmers

• the basic laws of supply and demand

• the labor force and natural resources of the country

• the allocation decisions of the government

Which is NOT a type of economic barrier?

• Common currency

• Embargo

• Tarrif

• Quota

What type of organization is the North Atlantic Treaty Organization (NATO)?

• a trading partnership

• a humanitarian agency

• a military alliance

• a global bank

Which outcome is a drawback of treaties such as the North American Free Trade Agreement (NAFTA)?

• job loss in domestic industries

• higher wages for low-skill workers

• increased safety regulations

• reduced innovation among entrepreneurs

The United States trades automobiles in Canada without worrying about tariffs.

• Free Trade

• Protectionism

• Fair Trade

Russia prevents problems resulting from foreign competition.

• Free Trade

• Protectionism

• Fair Trade