Unit 5 Review

How does specialization help trade?

• It makes goods more expensive.

• It allows countries to produce everything they need.

• It helps countries focus on producing goods they are best at, increasing efficiency.

• It reduces the need for trade between countries.

What is a tariff?

• A limit on the number of goods that can be imported.

• A tax on imported goods.

• A total ban on trade with another country.

• A system for exchanging currencies.

What is a quota?

• A limit on the number of goods that can be imported.

• A tax on imported goods.

• A ban on trade with another country.

• A measure of economic output per person.

Why do we need to exchange currencies in international trade?

• To ensure that goods are delivered faster.

• Because different countries use different money, it needs to be converted for trade.

• To avoid trade barriers like tariffs and quotas.

• To make trade less expensive.

Which of the following is not a benefit of voluntary trade?

• It allows countries to get goods they cannot produce themselves.

• It increases the variety of products available.

• It makes all products free.

• It encourages cooperation between countries.

What are the three main trade barriers?

• Specialization, tariffs, and quotas.

• Tariffs, quotas, and embargoes.

• Literacy rates, human capital, and GDP per capita.

• Capital goods, entrepreneurship, and specialization.

What is the literacy rate?

• The knowledge and skills workers gain through education and training.

• The percentage of people who can read and write.

• The total economic output is divided by the population.

• The number of schools in a country.

What are "capital goods"?

• The money workers earn from their jobs.

• Goods made by entrepreneurs to sell to consumers.

• Buildings, machinery, and equipment used to produce goods.

• The natural resources a country uses for trade.

How does human capital help a country's economy?

• By improving the knowledge and skills of workers through education and training.

• By increasing the number of people working in factories.

• By raising the literacy rate of entrepreneurs.

• By producing more capital goods.

What is GDP per capita?

• The total number of goods and services a country produces.

• The percentage of the population involved in trade.

• The total economic output of a country divided by its population.

• The amount of money spent on imported goods.