European Economics (MCM)

Why is it important for countries to specialize when trading?

• No country can produce all of the goods and services its citizens need

• Specialization is more efficient and cost effective

• Specialization can lead to relationships between countries that can result in alliances

• All of these

What type of trade barrier is this? The U.S. decides to charge an extra 20 cents per pound on avocados from Argentina to protect domestic avocado farm profits.

• Tariff

• Quota

• Embargo

What type of trade barrier is this? During WWII, Australia stopped all trade with Japan because the countries were on opposite sides of the war.

• Tariff

• Embargo

• Quota

What type of trade barrier is this? Brazil chooses to limit the number of U.S. automobiles that can be sold in Brazil to protect its local automobile dealerships.

• Tariff

• Embargo

• Quota

What type of trade barrier is this? The U.K. taxes all wood imports from Canada to make domestic wood cheaper.

• Tariff

• Embargo

• Quota

What type of trade barrier is this? The European Union bans all trade with Iran because Iran supports terrorist organizations.

• Tariff

• Quota

• Embargo

Why does international trade require a system of exchanging currency?

• The value of currencies is constantly changing.

• Fees are often charged for exchanging currency.

• Counties have different currencies with different values, and you need to know how much the currency is worth to make trade fair.

• None of these.

What was the purpose of the European Union?

• Unite the different countries in Europe in cooperation.

• Promote trade and economic growth.

• Establish a single currency, the Euro.

• All of these.

The relationship between the members of the E.U. can best be described as:

• A loose alliance between several countries

• An autocracy

• A presidential democracy

• A federation

The level of wealth and material comfort available to a people

• Standard of Living

• Currency Exchange Rate

• Boycott

• Trade Barrier