Unit 1. Theories of International Trade

Trade theory holding that nations should accumulate financial wealth, usually in form of gold, by encouraging exports & discouraging imports. The government implemented .............. to promote domestic industry and exports.

It is the separation of the tasks in any economic system or organization so that participants may specialize (specialisation). What is it?

Explains patterns of international trade based on differences in factor endowments. According to the .........., countries export goods that intensively use their abundant factors.

New industry requiring protection from international competition. Many developing countries employ ......... protection to nurture local industries.

Situation where a country's exports exceed its imports, resulting in a positive balance of trade. The trade ......... grew as the country exported more goods than it imported.

Difference between the value of a country's exports and imports. A trade surplus indicates a positive ........, while a deficit indicates a negative one.

Tax on imported goods The government imposed a ........ on steel imports to protect domestic producers.

Limit on the quantity of a good that can be imported The government established an ........ to control the influx of foreign automobiles.

Economic policy restricting imports through tariffs, quotas, or other barriers The government implemented ........ to shield domestic industries from foreign competition.

Situation where a country's imports exceed its exports, resulting in a negative balance of trade The trade ...... widened as the nation imported more goods than it exported.