Business & Tech Chp 3

Absolute advantage exists when a country is able to produce a good or a service

• that is more attractive than those made in other countries.

• more quickly than other countries.

• using fewer resources than other countries.

• at a lower cost than other countries.

A nation has a trade surplus if

• the value of its imports is greater than the value of its exports.

• the quantity of its imports is greater than the quantity of its exports.

• the value of its exports is greater than the value of its imports.

• the quantity of its exports is greater than the quantity of its imports.

A high rate of inflation in a country tends to increase demand for that nations currency.

• True

• False

A nation with a favorable balance of payments sends more money to other nations than it receives from them.

• True

• False

The United States imports a large share of the natural resources used by its industries.

• True

• False

In international business transactions, businesses should consider the exchange rate, which is the value of one currency compared with

• the value of currency from a different nation.

• the value of an ounce of gold.

• the value of a nations GDP.

• the value of the U.S. Dollar.

Common markets are groups of nations that eliminate trade barriers and encourage investment in each other's countries.

• True

• False

__________ is making, buying, and selling goods and services within a country.

• Foreign trade

• International business

• Domestic Business

• Multinational trade

Quotas may be set by a country to protect one of its industries from too much foreign competition.

• True

• False

Comparative advantage is a situation in which a nation produces products that it:

• is able to produce using the fewest resources.

• is able to produce at which it is relatively more efficient.

• is able to produce at a lower cost than other countries.

• is able to produce that are in high demand in other countries.