BAIB3004 Week 1 Seminar 24/25

What is international trade?

• Trade between regions within a country

• Trade between different countries

• Trade between provinces

• Trade between cities

Which of the following is NOT a common reason for engaging in international trade?

• To reach new markets

• To reduce production costs

• To avoid tariffs

• To increase domestic competition

What is a tariff in international trade?

• A limit on the quantity of imported goods

• A tax on imported goods

• A subsidy for exported goods

• A trade agreement between countries

What does the term "dumping" refer to in international trade?

• Discarding excess inventory in foreign markets

• Selling goods abroad at a price lower than in the domestic market

• Importing more goods than a country can consume

• Exporting environmentally harmful products

Which organisation deals with the rules of trade between nations?

• International Monetary Fund (IMF)

• World Trade Organisation (WTO)

• World Bank

• United Nations (UN)

What is a "trade deficit"?

• When a country's exports exceed its imports

• When a country's imports exceed its exports

• When a country has no international trade

• When two countries have equal trade

What is a "free trade agreement" (FTA)?

• An agreement to trade goods for free

• A pact between countries to reduce or eliminate trade barriers

• A contract to exclusively trade with one country

• An agreement to trade only in local currencies

Which of the following is an example of a non-tariff barrier to trade?

• Import duties

• Safety standards

• Export taxes

• Customs fees

What does the term "comparative advantage" mean in international trade?

• The ability to produce all goods more efficiently than other countries

• The ability to produce a good at a lower opportunity cost than other countries

• Having more natural resources than other countries

• Having a larger workforce than other countries

What is meant by "foreign direct investment" (FDI)?

• When a company from one country purchases government bonds from another country

• When a company establishes business operations in a foreign country

• When a country provides aid to another country

• When individuals invest in foreign stock markets