Foreign Trade

When it comes to trade, specialization refers to...

• when an individual becomes very successful in a particular career.

• encouraging well educated individuals to move to their nation.

• where a nation decides who they want to buy and sell from.

• where a nation focuses on the production of a particular product or resource.

Specialization appeals to many nations because...

• it encourages a democratic form of government.

• it helps a nation develop many vital industries.

• it increases productivity and profit.

• it increases immigration to the country.

Which type of economic trade advantage refers to the the advantage that one country has because they produce more than another country?

• Absolute Advantage

• Relative Advantage

• Comparative Advantage

• Economic Advantage

Which type of trade advantage involves having a more favorable opportunity cost than another country?

• Absolute Advantage

• Relative Advantage

• Comparative Advantage

• Economic Advantage

If exports increase in a given country, which of the following will not occur?

• Increases the demand for a particular good.

• Prices for a particular good will increase.

• More jobs will be created in the exporting country.

• The supply of goods will increase in the exporting country.

If imports increase in a given country, which of the following will not occur?

• Increases the supply of a pustular good to the importing country.

• Exports will increase to try and offset the imports coming into a country.

• Producers will have to compete more with each other.

• Prices for a particular good will decrease in the importing country.

Why do nations set up trade barriers?

• To encourage more global cooperation.

• To decrease the amount of technology stolen by another country.

• To limit the amount of travel and immigration between nations.

• To try and limit trade between different nations.

Which type of trade barrier involves only allowing a certain number of goods from a nation?

• Embargo

• Tariff

• Quota

• Voluntary Export Restraint

Which type of trade barrier involves a tax being placed on imported goods?

• Embargo

• Tariff

• Quota

• Voluntary Export Restraint

Which of the following is not an impact to trade barriers?

• Inefficiency might develop due to a lack of competition.

• Tensions can erupt into a trade war.

• More cooperation and negotiations between competing nations.

• Higher prices due to a limit of imports.