Understanding Global Trade and Economics

What system did most European countries follow before the 19th century to prioritize self-sufficiency?

• Socialism

• Feudalism

• Mercantilism

• Capitalism

What does mercantilism aim to maximize?

• Exports

• Imports

• Domestic trade

• Consumer spending

What did classical economists in the late 18th century support?

• Isolationism

• Mercantilism

• Comparative advantage

• Trade barriers

What is the main idea behind countries specializing according to classical economists?

• To increase gold reserves

• To reduce productivity

• To increase import taxes

• To innovate and create new products

What does GDP stand for?

• Global Domestic Product

• Gross Domestic Product

• General Domestic Product

• Gross Development Product

What is the role of the World Trade Organization (WTO)?

• To increase tariffs

• To promote domestic trade

• To facilitate international trade

• To support mercantilism

What did the General Agreement on Tariffs and Trade (GATT) evolve into?

• The United Nations

• The European Union

• The International Monetary Fund

• The World Trade Organization

What does the WTO try to include in its definition of trade?

• Only goods

• Only services

• Both goods and services

• None of the above

What agreement was designed to facilitate more trade among the United States, Mexico, and Canada?

• European Free Trade Association

• NAFTA

• ASEAN Free Trade Area

• Trans-Pacific Partnership

What is the principle of comparative advantage?

• A country should focus on what it can produce best

• A country should not trade

• A country should only export goods

• A country should maximize imports