International Trade Quiz

What is international trade?

• The purchase and sale of goods and services by companies in different countries.

• The exchange of goods and services within a single country.

• The process of buying and selling stocks and bonds.

• The regulation of domestic markets by the government.

Which of the following is a benefit of international trade?

• Decreased market competition.

• Limited access to foreign goods.

• More competitive pricing and cheaper products.

• Increased prices for consumers.

What is an export?

• A product sold to the global market.

• A product bought from the global market.

• A service provided within a country.

• A tax imposed on foreign goods.

What is comparative advantage?

• The ability to restrict imports from other countries.

• The ability to impose tariffs on foreign goods.

• The ability to produce more of a good than another country.

• The ability to produce a good at a lower opportunity cost than others.

Who is credited with the theory of comparative advantage?

• Thomas J. Catalano

• Jared Ecker

• David Ricardo

• Adam Smith

What is protectionism?

• A policy of increasing foreign direct investment.

• A policy of regulating international trade to protect domestic markets.

• A policy of unrestricted international trade.

• A policy of reducing tariffs and quotas.

Which of the following is a common barrier to international trade?

• Open market policies

• Increased foreign investment

• Subsidies

• Free trade agreements

What is the main idea behind free trade?

• To impose tariffs on all imported goods.

• To increase government control over trade.

• To allow market forces to operate without restrictions.

• To protect domestic industries from foreign competition.

What is a potential benefit of foreign direct investment (FDI)?

• Decreased employment levels

• Lower company revenues

• Increased foreign currency and expertise

• Reduced gross domestic product (GDP)

What creates the need for international trade?

• Uniformity in technology and resources across nations.

• The desire to limit foreign goods in domestic markets.

• Differences in technology, resources, and demand among nations.

• The need to increase tariffs and quotas.