Trade and Finance Quiz

What is the primary definition of trade in finance?

• The illegal exchange of goods or services

• The forced exchange of goods or services

• The voluntary exchange of goods or services

• The mandatory exchange of goods or services

In financial markets, what does trading refer to?

• Purchasing and selling real estate

• Purchasing and selling intellectual property

• Purchasing and selling securities or other assets

• Purchasing and selling agricultural products

What is the principle of comparative advantage?

• The ability of a country to produce goods with the highest cost

• The ability of a country to produce goods without any trade

• The ability of a country to produce a good at a lower opportunity cost

• The ability of a country to produce all goods more efficiently

What is a trade deficit?

• When a country has balanced trade

• When a country has no trade activity

• When a country imports more than it exports

• When a country exports more than it imports

Which economist is commonly associated with the Law of Comparative Advantage?

• David Ricardo

• Milton Friedman

• John Maynard Keynes

• Adam Smith

What is one criticism of free trade?

• It always benefits all countries equally

• It can lead to excessive reliance on global markets

• It eliminates all domestic industries

• It guarantees economic growth for all

What is one benefit of international trade?

• It reduces global standing

• It eliminates the need for foreign currency

• It encourages investment in a country globally

• It decreases product variety

What is rent-seeking in the context of trade?

• The process of finding rental properties

• The act of lobbying the government to protect specific interests

• The practice of renting goods for trade

• The strategy of reducing trade barriers

What is the significance of exports in international trade?

• They are products that remain within a country

• They are products sold to the global market

• They are products bought from the global market

• They are products that are not traded

What is one strategic reason for avoiding excessive reliance on free trade?

• To become dependent on a single trade partner

• To eliminate all domestic production

• To ensure complete isolation from global markets

• To avoid dependency on the global market for critical goods