Ch 5 Lesson 2: Overview of Domestic and World Trade Questions

Consider how a small company that creates knit scarves is impacted by globalization. Describe the steps the company took to join the global market.

• The company expanded its online presence to reach international customers.

• The company focused solely on local markets.

• The company stopped using imported materials.

• The company reduced its workforce to cut costs.

Fill in the blank: Domestic trade is trade that happens inside of one _______.

• country

• city

• continent

• state

Global trade is:

• The exchange of goods and services between countries

• The trade within a single country

• The local market activities

• The barter system within a community

Which of the following is an example of global trade?

• A) A local farmer selling produce at a farmer's market

• B) Ecuador selling bananas to a US wholesaler

• C) A bookstore selling books to local customers

• D) A company buying raw materials from a local supplier

What is absolute advantage in global trade?

• The ability of a country to produce a good more efficiently than another nation

• The ability of a country to produce all goods more efficiently than another nation

• The ability of a country to produce a good at a lower opportunity cost than another nation

• The ability of a country to produce goods without any trade restrictions

Which country is known for producing toys inexpensively and efficiently?

• United States

• China

• Ecuador

• Greenland

What is competitive advantage in global trade?

• A unique benefit that allows a country to outperform its competitors in the global market.

• A disadvantage that a country faces in international trade.

• A strategy to increase domestic market share.

• A method to reduce production costs without improving quality.

What is one potential benefit of importing goods according to the text?

• Higher domestic prices

• New product market

• Increased unemployment

• Reduced consumer choice

How do imports help businesses and consumers according to the passage?

• Imports provide businesses with access to a wider range of products and raw materials, and consumers benefit from a greater variety of goods at competitive prices.

• Imports lead to increased competition for local businesses, which can negatively impact their market share.

• Imports have no significant impact on businesses and consumers.

• Imports only benefit businesses by reducing production costs.

What is one way exports impact the economy?

• Decrease in jobs

• Increase in domestic prices

• Create jobs

• Reduce international trade.