Unit 4 Final Review

Which statement best explains why nations must trade?

• All nations belong to free trade agreements.

• All nations seek out new production methods.

• No nation has all necessary resources.

• No nation can employ all of its laborers.

Countries will export goods and services that they can produce at lower costs. This is called —

• oligarchy

• monopoly

• comparative advantage

• capitalism

Which of the following is NOT an effect of comparative advantage on international trade?

• Nations monitor the percentage of their urban population.

• It makes efficient use of human resources.

• Nations produce goods and services they can sell for a profit.

• It influences the development of a variety of industries.

What is comparative advantage largely responsible for?

• International trade

• Negotiated

• Businesses

• Determines

Economic benefits of comparative advantage?

• Trade promotion and international cooperation activities of Trade bodies

• Between countries should open trade and exchange of goods for better development together.

• Providing excellent chances for the textile industry to grow aggressively in the international market

• Free trade agreements are constantly being negotiated

Which of the following countries make up NAFTA?

• United states, Canada, Alaska

• United states, Canada, Mexico

• United states, Canada, Iceland

• United States, Alaska, Mexico

Trading blocs do which of the following?

• Allow free movement of goods between member countries

• offer economic support to member countries

• Allow tax concessions on goods manufactured by member countries

• All of the above

Which of these country is NOT a member of ASEAN?

• Cambodia

• Brunei darussalam

• Laos

• China

An argument against trade protectionism is that it will increase

• competition for domestic industries

• domestic price level

• the current account deficit

• opportunities for domestic infant industries

Which of the following is NOT an argument in favor of protectionism?

• Protectionism shields infant industries from foreign competition

• Protectionism safeguards workers’ jobs

• Protectionism promotes industries that are essential to national security

• Protectionism makes domestic firms more competitive in the long run