Free Trade v. Trade Barriers

Which of the following is an example of a tariff?

• A government-imposed limit on the number of cars imported from Japan

• A tax placed on imported steel from China

• A ban on agricultural imports from a certain country

• A regulation requiring imported goods to meet specific safety standards

A quota is a trade barrier that:

• Increases the price of imported goods

• Limits the quantity of a specific good that can be imported

• Prohibits all trade with a certain country

• Requires government approval before goods can be exported

What is an embargo?

• A complete ban on trade with a specific country

• A tax on imported goods

• A government subsidy for domestic producers

• A requirement for imported goods to pass safety inspections

Subsidies are considered trade barriers because they:

• Can make imported goods cheaper than domestic products

• Can make domestic products cheaper than imports

• Encourage countries to remove tariffs

• Increase the demand for imported goods

Which of the following is a major benefit of free trade agreements?

• Increased prices for consumers

• Increased trade and more productivity

• Less competition for domestic producers

• Increased government revenue from import taxes

What is one potential drawback of free trade agreements?

• They encourage economic growth in all industries

• They may lead to job losses for domestic companies

• They increase costs for exporters

• They make imported goods more expensive

Which of the following is an example of a free trade zone?

• European Union (EU)

• World Trade Organization (WTO)

• United Nations (UN)

• International Monetary Fund (IMF)

One reason businesses support free trade agreements is that they:

• Reduce consumer demand for goods

• Limit the number of goods that can be imported

• Open new markets and allow for increased exports

• Increase tariffs on domestic goods

What is one reason some people oppose free trade agreements?

• They reduce choices for consumers

• They can lead to job loss to countries with cheaper labor

• They increase costs for domestic businesses

• They create additional trade barriers

What is a common effect of trade barriers on international relations?

• They always improve diplomatic ties

• They can lead to trade wars and retaliatory tariffs

• They make countries more willing to trade freely

• They reduce the need for negotiations between countries