Lesson 4.1 International Trade Review

What are exports?

• Goods and services purchased from other countries.

• Goods and services sold to other countries.

• Goods and services produced for domestic use.

• Goods and services exchanged within a nation.

Why do most countries not produce all the goods and services they need?

• They lack interest in manufacturing.

• They prefer to import everything.

• They get some goods and services from other nations.

• They have no resources at all.

What is a reason for economic interdependence among countries?

• Each country has the same resources.

• Each country possesses unique resources and capabilities.

• All countries produce the same goods.

• Countries do not trade with each other.

What is absolute advantage in international trade?

• When a country can produce an item at the lowest cost possible due to natural resources or talents.

• When a country can produce more goods than another country.

• When a country has the highest GDP in the world.

• When a country exports more than it imports.

What is the significance of an educated labor force in achieving a comparative advantage?

• It reduces production costs

• It increases the efficiency of production

• It allows for higher tariffs

• It decreases the need for imports

Why might a country focus on industries where it has a comparative advantage?

• To increase import tariffs

• To maximize economic value and efficiency

• To reduce the labor force

• To decrease exports

How does international trade affect businesses? Select all that apply.

• Creates competition, which can create high-quality goods with lower prices.

• Offers businesses to expand in other countries

• Employment rate increases in the home country and abroad

• Improves the standard of living by giving people more options to choose from when making purchasing decisions

What is a trade surplus?

• A negative balance of trade when a nation imports more than it exports

• A positive balance of trade when a nation exports more than it imports

• The total value of a nation's exports

• The total value of a nation's imports

What is a tariff?

• A tax on exports

• A tax on imports

• A subsidy for local businesses

• A fee for international travel

Which tariff is specifically designed to generate income for the government?

• Protective tariff

• Revenue-producing tariff

• Export tariff

• Import subsidy