International Trade and Economics

What happens if the government fails to use the tax system effectively?

• Unfair distribution of income

• Fair distribution of income

• Increased social services

• Economic stability

What is international trade?

• Exchange of goods or services across international borders

• Trade within a country

• Bartering goods

• Selling goods at a local market

What causes an increase in demand for goods and services?

• Increase in population growth

• Decrease in income levels

• Reduction in preferences

• Decrease in wealth

What is the effect of specialization on the standard of living?

• Increases the standard of living

• Decreases the standard of living

• Has no effect

• Only benefits the rich

Why do countries engage in international trade?

• To increase taxes

• To avoid imports

• To meet demand they cannot satisfy themselves

• To reduce natural resources

Which of the following is a demand reason for international trade?

• Climatic conditions

• Change in wealth

• Labour resources

• Natural resources

Which country is an example of a top coffee producer due to climatic conditions?

• South Africa

• Switzerland

• USA

• Brazil

How does international trade impact local economies?

• It decreases local production

• It only benefits large corporations

• It can boost local employment

• It has no impact

What role do tariffs play in international trade?

• They increase the cost of imports

• They decrease government revenue

• They promote free trade

• They have no effect on trade

Which factor is a major reason for countries to specialize in certain goods?

• Government regulations

• Availability of technology

• Population density

• Geographical location