Comprehension Check SS7E2

Why do countries specialize?

• To increase their efficiency and productivity

• To enhance international relationships

• To reduce their economic output

• To increase dependency on other countries

What are two advantages to specialization?

• Increased efficiency and deeper skill set

• Decreased production time and increased costs

• Reduced efficiency and broader skill set

• Increased production time and decreased costs

Which type of barrier to trade is similar to the economic term "tax"?

• Tariff

• Quota

• Embargo

• Subsidy

Why might a government set a quota on foreign goods?

• To reduce the trade deficit

• To increase the trade deficit

• To support local businesses

• All of the above

Why does international trade require a system for exchanging currency?

• To facilitate the buying and selling of goods across different currencies

• To standardize global pricing for all products

• To increase the complexity of international trade

• To reduce the volume of international trade

What is the stronger currency, the US dollar or one South African rand?

• US dollar

• South African rand

Why might South Africa limit the amount of gold that it exports?

• To increase the global gold prices

• To stabilize the national economy

• To conserve natural resources

• To comply with international trade agreements

What is an Embargo?

• A government order that restricts commerce with a specified country or the exchange of specific goods.

• A type of currency used in a specific country.

• A document that grants permission to operate a business.

• An agreement between two countries to stop trading with a third.

Why did the US President JFK prohibit all trade with Cuba in 1963?

• To pressure the Cuban government for political reforms

• As a response to the Cuban Missile Crisis

• To support the Bay of Pigs invasion

• Due to economic interests in the US

Why might the Nigerian president decrease the amount of oil coming from the country?

• To comply with international environmental agreements

• To negotiate better trade terms

• Due to external pressure from oil-importing countries

• To address domestic concerns over environmental pollution