IB: Summative #4 - Vocabulary

Trade Deficit occurs when:

• A country exports more than it imports

• A country imports more than it exports

• A country imposes tariffs on imports

• A country eliminates all trade barriers

What is a tariff?

• A. A free trade agreement between countries

• B. A tax imposed on imported goods

• C. A strategy for expanding international business

• D. A type of trade deficit

What does outsourcing involve?

• Shifting production or services to another country to reduce costs

• Eliminating trade barriers

• Expanding a business into new markets

• Increasing domestic employment

A trade surplus occurs when:

• A country exports more than it imports

• A country has a high number of imports

• International trade is restricted

• A country raises tariffs on exports

What does competition mean in an economic context?

• A. A trade war between two countries

• B. Rivalry between businesses to attract customers and increase market share

• C. Government control over imports and exports

• D. A cooperative agreement between businesses

What is a Free Trade Agreement (FTA)?

• A. A policy that increases taxes on imports

• B. A pact between countries to reduce or eliminate trade barriers

• C. A government-imposed limit on imports

• D. A business strategy to avoid tariffs

What is protectionism?

• Economic policies aimed at restricting imports to protect domestic industries

• A free-market approach to global trade

• A method used to expand international business

• A financial surplus generated by exports

An import quota is:

• A tax on exported goods

• A rule that eliminates trade barriers

• A limit on the amount of a specific good that can be imported

• A subsidy provided to domestic producers

Which of the following best defines globalization?

• The increasing interconnection of economies, cultures, and businesses worldwide

• A policy restricting international trade

• A method of increasing tariffs on imports

• A government’s attempt to isolate its economy

What is a subsidy?

• A tax placed on imported goods

• Financial assistance given by the government to support domestic industries

• A penalty imposed on businesses that outsource jobs

• A limit on the number of exports a country can have