International Trade

What is international trade?

• The exchange of goods and services between countries

• The exchange of goods and services within a country

• The exchange of goods and services between individuals

• The exchange of goods and services within a company

Which country is the world's largest importer?

• China

• Canada

• United States

• Brazil

What is the annual difference between a country's exports and imports called?

• Trade surplus

• Trade deficit

• Net exports

• Trade balance

Why does the US import a lot of clothing?

• Because it is cheaper to import than produce domestically

• Because it is more fashionable to wear imported clothing

• Because domestic clothing production is insufficient

• Because it helps other countries' economies

What is the North American Free Trade Agreement (NAFTA)?

• An agreement between the US, Canada, and Mexico to increase trade barriers

• An agreement between the US, Canada, and Mexico to decrease trade barriers

• An agreement between the US and China to increase trade barriers

• An agreement between the US and China to decrease trade barriers

What is the World Trade Organization (WTO)?

• An organization that promotes protectionist policies

• An organization that promotes free trade and settles trade disputes

• An organization that favors rich countries in international trade

• An organization that protects the environment and workers in international trade

What is exchange rate?

• The rate at which goods are exchanged between countries

• The rate at which a country's currency is exchanged for another country's currency

• The rate at which a country's imports and exports are balanced

• The rate at which a country's financial assets are exchanged

What happens when a country's currency appreciates?

• Imports become cheaper and exports become more expensive

• Imports become more expensive and exports become cheaper

• Both imports and exports become cheaper

• Both imports and exports become more expensive

What is the balance of payments?

• An accounting statement that records all international transactions

• An accounting statement that records a country's domestic transactions

• An accounting statement that records a company's international transactions

• An accounting statement that records a company's domestic transactions

What is the relationship between trade deficits and surpluses and a country's self-interest?

• Trade deficits are always in a country's self-interest

• Trade surpluses are always in a country's self-interest

• Trade deficits and surpluses can both be in a country's self-interest

• Trade deficits and surpluses are never in a country's self-interest