Why Countries Trade

Why are exports important for a country's economy?

• Exports help generate revenue, create jobs, and contribute to economic growth.

• Exports have no impact on a country's economy

• Imports are more important than exports

• Exports only benefit the receiving country

How does international trade impact the economic growth of a country?

• International trade hinders competition and promotes monopolies

• International trade has no impact on economic growth

• International trade can impact economic growth by increasing access to new markets, promoting specialization, and fostering competition.

• International trade leads to decreased access to new markets

What is globalization and how does it relate to international trade?

• Globalization is the process of creating barriers between economies, cultures, and societies on a global scale, and it relates to international trade by increasing tariffs and import restrictions.

• Globalization is the decentralization of economies, cultures, and societies on a global scale, and it relates to international trade by promoting self-sufficiency and reducing the need for trade.

• Globalization is the interconnectedness of economies, cultures, and societies on a global scale, and it relates to international trade by facilitating the movement of goods, services, and capital across borders.

• Globalization is the isolation of economies, cultures, and societies on a global scale, and it relates to international trade by restricting the movement of goods, services, and capital across borders.

What are some examples of trade agreements between countries?

• United Nations Security Council Resolution on Trade

• Examples of trade agreements include NAFTA (North American Free Trade Agreement), EU-Canada Comprehensive Economic and Trade Agreement (CETA), and ASEAN Free Trade Area (AFTA).

• World Trade Organization (WTO) Treaty

• G7 Summit Agreement

Explain the concept of comparative advantage in international trade.

• The concept of comparative advantage states that countries should specialize in producing goods and services that they can produce at a lower opportunity cost than other countries.

• The concept of comparative advantage means that countries should produce all goods and services domestically to avoid reliance on other countries.

• The concept of comparative advantage states that countries should produce goods and services that they can sell at a higher price than other countries.

• Comparative advantage suggests that countries should only trade with neighboring countries to minimize transportation costs.

How does importing goods benefit a country's economy?

• By limiting consumer choices and increasing prices

• By providing consumers with a wider variety of products at lower prices, stimulating competition, and allowing domestic industries to focus on their competitive advantages.

• By increasing unemployment and reducing domestic production

• By weakening the country's currency and reducing international trade opportunities

What are the potential drawbacks of relying too heavily on international trade?

• Strengthening of domestic industries

• Potential drawbacks include vulnerability to global economic downturns, loss of domestic industries, and dependence on other countries for essential goods.

• Reduced competition in the global market

• Increased job opportunities

How does international trade contribute to cultural exchange between countries?

• International trade facilitates the exchange of goods, services, and ideas between countries, leading to cultural interaction and influence.

• Cultural exchange between countries is not influenced by international trade

• International trade only leads to economic exchange, not cultural exchange

• International trade has no impact on cultural exchange

What role do tariffs and quotas play in international trade?

• They have no impact on international trade

• They increase the cost of imports for domestic consumers

• They can restrict imports and protect domestic industries.

• They promote free trade and open markets

Discuss the impact of free trade agreements on the global economy.

• Free trade agreements only have positive impacts on the global economy

• Free trade agreements only have negative impacts on the global economy

• Free trade agreements have no impact on the global economy

• Free trade agreements can have both positive and negative impacts on the global economy.