International Test Review

Which of the following is the driving force for international trade and dictates what countries should produce and who they should trade with?

• Comparative Advantage

• Absolute Advantage

• Exchange Rate

• Trade Blocs

When a nation can produce more of a given product using a given amount of resources.

• Comparative Advantage

• Absolute Advantage

• Exchange Rate

• Free Trade

Sending goods and services to another country for sale.

• import

• exchange rate

• export

• net imports

Nation's ability to produce a product most efficiently given all the other products that could be produced (less opportunity cost)

• Comparative Advantage

• Absolute Advantage

• Exchange Rate

• Free Trade

Permitting the people and businesses of a country to buy and sell where they please without government restrictions.

• Exchange Rates

• Protectionism

• Free Trade

• Competitive Advantage

When a country imports more than it exports.

• Trade Balance

• Trade Deficit

• Trade Surplus

• Net Exports

Bring goods and services into a country from another nation for sale.

• Import

• Exchange Rate

• Export

• Subsidy

When a nation protects its home (domestic) industries from outside competition by establishing barriers to trade.

• Exchange Rate

• Protectionism

• Free Trade

• Appreciation

A trade restriction, used to prevent a foreign product from freely entering a nation's territory.

• Trade Barrier

• Trade Deficit

• Exchange Rate

• Standard

Tax on imported goods

• subsidy

• tariff

• quota

• standard