Voluntary Trade

Voluntary trade occurs when countries choose to engage in the _________ with one another.

• money

• exchange of goods

Trade barriers are natural or man-made _______.

• obstacles to voluntary trade

• rivers

• roads

Voluntary trade is based on the principle of _______.

• mutual benefit

• competition

• monopoly

• coercion

Which of the following is a benefit of voluntary trade?

• Increased tariffs

• Access to a variety of goods

• Decreased competition

• Higher prices

Voluntary trade can lead to _______ between countries.

• conflict

• cooperation

• isolation

• war

A country specializes in producing goods it can make efficiently and trades for goods it cannot produce as efficiently. This is known as _______.

• absolute advantage

• comparative advantage

• trade deficit

• protectionism

Which of the following is NOT a characteristic of voluntary trade?

• Mutual agreement

• Coercion

• Exchange of goods

• Benefit to both parties

Voluntary trade encourages _______ among nations.

• self-sufficiency

• interdependence

• autarky

• isolation

The concept of voluntary trade is most closely associated with which economic theory?

• Mercantilism

• Capitalism

• Socialism

• Feudalism

Which of the following is an example of a trade barrier?

• Tariff

• Free trade agreement

• Voluntary exchange

• Open market