International Quiz Review

Which of the following actions would a protectionist government most likely avoid to support its domestic automobile industry?

• imposing import tariffs on foreign automobiles

• providing subsidies to domestic automobile manufacturers

• establishing a quota on imported automobiles

• reducing the sales tax on imported automobiles

If the value of the US dollar depreciates relative to the Japanese yen, who would be most likely to benefit?

• Japanese tourists visiting the US

• US exporters of goods to Japan

• Japanese importers of goods from the US

• US exporters of goods to Japan

What is the PRIMARY reason that countries engage in international trade due to comparative advantage?

• It increases government revenue.

• It promotes self-sufficiency.

• It fosters economic interdependence.

• It allows for specialization and increased efficiency.

What is the primary reason for a country to impose tariffs on imported goods?

• To increase the country's foreign debt

• To discourage domestic production

• To attract more foreign investors

• To safeguard local industries from overseas competition

What effect will a depreciation of the US dollar have on the country's exports?

• The United States will likely export fewer goods.

• The United States will likely export the same amount of goods.

• The United States will likely export more goods.

• The United States will no longer need to export goods.

3. What is meant by comparative advantage in international trade?

• Ability to produce a good or service at a higher opportunity cost than another country
• Ability to produce a good or service without any opportunity cost
• Ability to produce a good or service at the same opportunity cost as another country
• Ability to produce a good or service at a lower opportunity cost than another country

5. How does free trade promote economic welfare?

• Free trade hinders economic growth and development.
• Free trade leads to higher prices and limited choices of goods and services.
• Free trade allows countries to specialize and leads to increased efficiency, lower prices, and a wider variety of goods and services.
• Free trade increases unemployment and poverty.

1. Which of the following is an example of a trade barrier?

• Embargo
• Subsidy
• Free trade
• Tariff

How do countries benefit from trade barriers?

• They promote domestic industries and protect jobs

• They encourage competition and innovation

• They increase access to foreign goods and services

• They improve economic efficiency and lower prices

5. What is the potential downside of relying heavily on trade barriers?

• 5. Limited access to foreign markets and resources

• 5. Increased competition and market volatility

• 5. Reduced job opportunities and economic inequality

• 5. Enhanced economic diversification and stability