Module 3 Test Review

A sustained trade deficit could be a problem for a country because ____________.

• fewer exports translates into lower production and decreased employment

• more exports translates into lower production and increased employment

• fewer imports translates into lower production and decreased employment

• more imports translates into higher production and increased employment

Other nations could make the United States trade deficit larger if they ____________

• purchased fewer US exports

• purchased more US exports

• decreased the quantity of their exports to the United States

• decreased taxes on their imports

A trade deficit occurs when ___________

• imports are greater than exports

• federal spending on programs is greater than income from programs

• exports are greater than imports

• profits are greater than costs

______________ are products that are produced domestically but sold internationally.

• Transfer payments

• Imports

• Exports

• Voluntary exchanges

When a country exports more than it imports, it is operating with a ______________

• trade deficit

• trade surplus

• budget surplus

• budget deficit

Which of these is an example of an involuntary exchange?

• You buy a shirt online

• Your wallet is stolen

• You trade an apple for an orange with your friend at lunch

• You purchase vegetables at the farmers market

Involuntary exchanges are not preferred because  _________.

• they do not happen at agreed upon prices

• both parties benefit

• no one benefits

• all of these

A(n) __________ is when both parties are willing and agree to exchange a product for an agreed upon value.

• involuntary exchange

• benefits of trade

• voluntary exchange

• costs of trade

Which of these is not expected when international trade occurs?

• wider variety of products

• access to resources

• higher prices

• lower unemployment

Which of these is NOT a benefit of trade?

• fulfilment of needs otherwise not fulfilled

• increase in maximum satisfaction

• access to resources

• creation of dependencies