International Trade and Economics Quiz

Why do countries participate in voluntary trade?

• To avoid using money

• To take advantage of one country

• Because both countries benefit

• To stop trading with other nations

Which of the following is a benefit of voluntary trade?

• Countries lose money

• One country gets everything

• Both countries get what they need

• There is no benefit

Australia exports coal and iron ore because:

• It is cheaper to import it

• It specializes in producing these resources

• It needs to get rid of them

• Other countries do not want them

What is specialization in economics?

• Trading money only

• Focusing on one job only

• Producing all goods on your own

• Producing goods a country can make best

Which country might trade cars with Australia?

• One that produces wool

• One that specializes in technology

• One that grows wheat

• One that produces coal

Which is the best example of specialization?

• Australia grows everything it eats

• Australia imports oil from a nearby island

• Australia only trades with one country

• Australia focuses on mining and exports minerals

Voluntary trade helps nations because:

• They avoid competition

• They never have to use resources

• It allows them to focus on what they do best

• It keeps them isolated

When Australia trades wool for electronics, this is an example of:

• Forced trade

• Tariff

• Voluntary trade

• Embargo

What is a tariff?

• A limit on how many goods can be imported

• A tax placed on imported goods

• A complete ban on trade

• A special type of money

What is a quota?

• A tax on goods

• A reward for selling goods

• A limit on the number of goods imported

• A kind of trading port