Understanding Balance of Trade

What analogy is used to explain the balance of trade?

• A scale

• A balance beam

• A pendulum

• A seesaw

What is the ideal situation for a country in terms of trade balance?

• Importing more than exporting

• Having equal imports and exports

• Exporting more than importing

• Neither importing nor exporting

What is one of the benefits of having a trade surplus?

• Increased influence and wealth

• Decreased influence on other countries

• Lower export rates

• Higher import taxes

How can governments attempt to influence the balance of trade?

• By increasing exports

• By reducing imports

• By imposing taxes on imports

• By banning foreign trade

What historical example is used to illustrate government intervention in trade?

• The US textile industry

• The US auto industry

• The US electronics industry

• The US agriculture industry