Understanding Trade and Interdependence

Why do countries engage in trade?

• To grow their economies and provide resources their citizens need

• To isolate themselves from other countries

• To reduce their economic growth

• To increase scarcity.

What does interdependence mean in the context of trade?

• A) People and countries depend on one another for goods and services

• B) Countries are completely independent

• C) People do not rely on each other

• D) Goods and services are not exchanged.

What is 'Comparative advantage'?

• A country's ability to produce a product more efficiently than other products

• A country's ability to consume more than it produces

• A country's ability to import more than it exports

• A country's ability to produce less efficiently than other countries.

Which of the following is an example of a product that might be associated with a country's comparative advantage?

• Copper

• Wheat

• Cars

• Electronics

Comparative advantage refers to: A) What a country is good at producing B) What a country is bad at producing C) What a country imports D) What a country exports.

• What a country is good at producing

• What a country is bad at producing

• What a country imports

• What a country exports

What is domestic trade?

• Trade that takes place within the same country

• Trade with other countries

• Trade with neighboring countries

• Trade with international businesses.

What are imports?

• A) Goods sold to other countries

• B) Goods bought from another country and brought in

• C) Goods traded within the same country

• D) Goods exchanged with local businesses.

What could be a consequence of free trade for U.S. workers?

• It could lead to more job opportunities.

• It could lead to U.S. workers losing jobs.

• It guarantees job security.

• It increases wages for all workers.

What percentage of the world's countries are considered developed?

• 10%

• 50%

• 75%

• 90%

Which of the following is NOT a characteristic of a developed country?

• Less productive economy

• Strong economy

• High standard of living

• Advanced technology