International Trade and Public Policy Quiz

What is specialization in the context of international trade?

• Producing a narrow range of products

• Exporting all domestic products

• Producing a wide range of products

• Importing goods from other countries

What does economic interdependence refer to?

• A decrease in international trade

• Nations being self-sufficient

• Producers depending on others for goods and services

• The ability to produce all goods domestically

What are exports?

• Goods produced for domestic consumption only

• Goods that are not traded internationally

• Goods purchased from another country

• Goods produced in one country and sold to another

What is a tariff?

• A tax on exported goods

• A type of trade agreement

• A fee charged for imported goods

• A subsidy for domestic producers

What is dumping?

• Selling products at a higher price abroad

• Exporting goods without regulations

• Selling products at a lower price in another country

• Importing goods without tariffs

What is a protective tariff?

• A subsidy for foreign goods

• A tax on imported goods to protect domestic industries

• A fee for exporting goods

• A tax on all imports

What is an embargo?

• A type of trade agreement

• A fee for importing goods

• A law that cuts off trade with a specific country

• A tax on exports

What is one impact of trade barriers?

• Increased competition

• More efficient industries

• Higher prices for consumers

• Lower prices for consumers

What is protectionism?

• The encouragement of imports

• The reduction of tariffs

• The use of trade barriers to protect domestic industries

• The promotion of free trade

What is the law of comparative advantage?

• Nations gain by trading goods and services

• Nations should produce everything domestically

• Trade has no impact on the economy

• All nations are equal in production capabilities