International Trade Quiz

The purchase, sale, or exchange of goods and services across national borders is called

Answer explanation

The correct term for the purchase, sale, or exchange of goods and services across national borders is 'international trade'. This encompasses all economic transactions that occur between countries.

A trade theory which holds that a government can improve the economic well-being of the country by encouraging exports and stifling imports to accumulate wealth in the form of precious metals is

(a)  

Answer explanation

The correct answer is Mercantilism, a trade theory that advocates for government policies to boost exports and limit imports, aiming to accumulate wealth in precious metals, thus enhancing national economic well-being.

is the condition that results when the value of a nation's exports is greater than the value of imports.

(a)  

Answer explanation

The condition described is known as a 'trade surplus', which occurs when a nation's exports exceed its imports, indicating a positive balance of trade.

A condition that results when the value of a country's imports is greater than the value of its exports is called

(a)  

Answer explanation

A trade deficit occurs when a country's imports exceed its exports, indicating that it is buying more from other countries than it is selling to them. Therefore, the correct answer is 'Trade deficit'.

Sending goods to another country for sale or trade is called

(a)  

Answer explanation

Sending goods to another country for sale or trade is known as exporting. This term specifically refers to the process of selling domestically produced goods to foreign markets.

A trade theory which holds that nations can increase their economic well-being by specialising in goods that they can produce more efficiently than anyone else is called

Answer explanation

The trade theory described is known as 'comparative advantage'. It suggests that nations should specialize in producing goods they can make more efficiently, leading to increased economic well-being through trade.

Bringing in goods from another country for sale or trade is called

(a)  

Answer explanation

Bringing in goods from another country for sale or trade is known as importing. This term specifically refers to the act of receiving products from abroad, making 'Importing' the correct choice.

is a trade theory which holds that nations should produce those goods for which they have the greatest relative advantage.

Answer explanation

The trade theory described is known as comparative advantage. It suggests that countries should specialize in producing goods where they have a lower opportunity cost, maximizing efficiency and trade benefits.

A trade theory which holds that nations will produce and export products that use large amounts of production factors that they have in abundance and will import products requiring a large amount of production factors that they lack is

Answer explanation

The theory described is the Heckscher-Ohlin model, which posits that countries export goods that utilize their abundant resources and import goods that require resources they lack.

Financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or some other form is called

(a)  

Answer explanation

Financial assistance to domestic producers, such as cash payments or tax breaks, is known as a subsidy. This term encompasses various forms of support aimed at promoting local production.