International Trade Study Guide

_________ are goods and services produced in one country and sold to other countries.

______ are goods and services purchased by one country from another country.

When a country can produce a good or service more efficiently than other countries is called______ advantage

what is a tax imposed on imported good?

What is the primary purpose of a Protective Tariff

• To generate government revenue

• To promote international cooperation

• To shield domestic industries

• To encourage Free Trade

Infant Industries Argument suggests:

• Protecting newly established industries

• Limiting all international trade

• Eliminating tariffs

• Advocating for fixed exchange rates

A country with a Trade Surplus:

• Exports more than it imports

• Imports more than it exports

• Has a balanced trade

• Has a flexible exchange rate

Fixed Exchange Rate is:

• Determined by market forces

• Tied to the value of another currency

• Always fluctuating

• A type of protective tariff

Foreign Exchange Rate measures:

• The value of domestic goods

• The rate of inflation

• The rate at which one currency can be exchanged for another

• The quantity of imported goods

Trade Deficit occurs when:

• Exports exceed imports

• Imports exceed exports

• There is a balance between imports and exports

• There is no international trade