Unit 4: International Trade and Globalization

What is the definition of "international trade"?

• The exchange of goods and services within a single nation

• The exchange of goods and services among nations

• The policy of restricting imports to protect domestic industries

• The ability of a country to produce goods at a lower opportunity cost than other countries

Which term describes the ability of a country to produce a good at a lower opportunity cost than another producer?

• Absolute advantage

• Trade deficit

• Comparative advantage

• Protectionism

What is a tariff?

• A limit on the quantity of goods that can be imported

• A tax on exported goods

• A tax on imported goods

• A trade agreement between countries

What does the term "protectionism" refer to?

• A policy of free international trade

• An economic policy of shielding an economy from imports

• A tax used to raise government revenue without restricting imports

• A limit placed on the quantities of a product that can be imported

What was the NAFTA replaced by in 2018?

• ASEAN Free Trade Area

• European Union

• USMCA (United States-Mexico-Canada Agreement)

• Trans-Pacific Partnership

What does the term "trade surplus" refer to in international trade?

• When a country imports more than it exports

• When a country exports more than it imports

• When a country has balanced its imports and exports

• When a country stops trading with other countries

What are the typical outcomes of implementing tariffs?

• Prices decrease, and quantity supplied increases

• Prices rise, and quantity supplied falls

• Trade surplus increases dramatically

• Globalization is enhanced

What is the primary effect of globalization?

• Decreased cultural exchanges

• Increased local economies

• The world becoming more interconnected because of trade and technology

• Reduction in technological advancements

What does "automation" refer to in a manufacturing context?

• Manual control of machinery

• Use of largely automatic equipment in manufacturing

• Decrease in production efficiency

• Increase in employment opportunities

What is meant by "creative destruction" in an economic context?

• Maintaining old products and companies

• The creation of a new product causes loss of jobs and companies in the old product

• The destruction of all creative industries

• The enhancement of creativity in the workforce