Workbook Pages 19 -23

Match the following terms with definitions

• Capital Goods

• skills, education, and experience of workers

• Human Capital

• the materials that are needed to produce goods and services

• Natural Resources

• a person who starts a new business

• Entrepreneur

• man-made materials (factories, machines, technology

• Productive Resources

• raw materials from nature

Match the following terms and definitions

• Investment

• the value of all the goods and services produced in a country in 1 year

• Gross Domestic Product (GDP)

• the typical lifestyle of people living within a given country (includes available goods and services)

• Standard of Living

• new ways of doing something that are more efficient

• Innovation

• money used to make money

• Literacy Rate

• the percentage of adults who can read and write

Cause

No country can produce ALL the _____ it's citizens need or want

Effect

Countries _____ in producing the goods or services they can produce at a lower ____ than other nations.

End Result

Countries then ____ with each other to get other goods and services they do not produce themselves.

Is interdependence among countries a good or bad thing? Explain your answer.

Countries often set up trade ​ (a)   to restrict trade. One example of a trade barrier is a(n) ​ (b)   , which entirely bans trade from a specific country or group of countries. This type of restriction is often set up for ​ (c)   reasons.

• barriers
• embargo
• political
• tariff
• quota
• incentives

Another example is a(n) ​ (a)   , which ​ (b)   how much of a foreign good is allowed to enter the country. This type of restriction benefits domestic producers by raising the price of goods. A third example is a(n)​ (c)   , which is a tax on ​ (d)   goods. Countries often use this type of restriction to ​ (e)   their own businesses from foreign competition.

• quota
• tariff
• protect
• embargo
• restricts
• imported
• exported

Many Chinese farmers grow corn, but China also imports corn from the United States. Corn imports lower the overall price of corn in China. Recently, Chinese farmers have been complaining that they cannot make a profit selling their corn at such low prices. Why might China consider placing a quota on corn from the United States?

• To stop the United States from shipping corn to China entirely

• To reduce the overall supply of corn and therefore, raise the price of corn

• To encourage consumers to buy corn grown in China, instead of corn

A study revealed that American consumers are choosing to buy cell phones from China and India because they are cheaper than many American-made cell phones. Why might the United States consider placing a tariff on cell phones made in foreign countries?

• To reduce the number of foreign cell phones allowed in the United States

• To encourage competition between America and foreign manufacturers

• To protect American manufacturers by raising the price of imported goods