Question 1

the increased interdependence
of economies around the globe. Countries are becoming more open to foreign trade and investment.

The process of countries becoming more
open to foreign trade and investment.

Accepted Answer

Globalization 

Factors driving globalization are:
- Lower shipping and communication costs
- Reduced trade barriers
- Increased specialization

Question 2

What are the factors that drive globalization?

Accepted Answer

Lower shipping and communication costs
 Reduced trade barriers
 Increased specialization

Question 3

How would you characterize world trade in goods over the past 40 years?
A. It has decreased dramatically.
B. It has grown dramatically.
C. It has decreased steadily.
D. It has grown steadily

Accepted Answer

B. It has grown dramatically.

Question 4

the total exports of final goods and services minus the total imports of final goods and services

Accepted Answer

Net exports (NX)

NX = Exports - Imports

Question 5

the difference between a nation’s total exports and total imports

Accepted Answer

Trade balance

Question 6

When exports exceed imports, indicating a positive trade balance

Accepted Answer

Trade surplus

Exports > Imports → NX > 0

Question 7

When imports exceed exports, indicating a negative trade balance

Accepted Answer

Trade deficit

Exports < Imports → NX < 0

Question 8

the ability of an individual, a firm, or a country to produce a good at a lower opportunity cost than a competitor can

Accepted Answer

Comparative advantage

Question 9

The highest-valued alternative that must be given up to engage in an activity.

Accepted Answer

Opportunity cost

Question 10

industries rely heavily on machinery, equipment, and infrastructure rather than human labor

Accepted Answer

capital-intensive

Question 11

industries depend more on human effort than on machinery

Accepted Answer

labor-intensive

Question 12

Comparative advantage can derive from what sources?

Accepted Answer

Climate and natural resources
Relative abundance of labor and/or capital
Technological differences
External economies

Question 13

When do countries benefit from trade?

Accepted Answer

a country can acquire goods for a lower opportunity cost than if it had to
produce them.

It can sell a good for a higher opportunity cost than what it costs to produce it

Question 14

Trade agreement between the United States, Mexico, and Canada

Accepted Answer

USMCA (formerly NAFTA)

Question 15

Regulates the trade of various goods and services, including textiles, investment, intellectual property, and agriculture

Also works to resolve trade disputes

Accepted Answer

World Trade Organization (WTO)

Question 16

A blanket term for governmental actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition.

Accepted Answer

Protectionism

Question 17

Two of the most common measures of protectionism are:

Accepted Answer

Tariffs and import quotas

Question 18

Goods and services produced domestically but sold in other countries

Accepted Answer

Exports

Question 19

Goods and services bought domestically but produced in other countries

Accepted Answer

Imports

Question 20

A tax imposed by a government on imported goods and services.

Accepted Answer

Tariffs

Question 21

Limits on the quantity of products that can be imported into a country

Accepted Answer

Quotas

Function like tariffs, except that the government does not receive any revenue

Question 22

What are the effects of tariffs?

Accepted Answer

Consumers pay more and buy less of the good.
Domestic producers can sell more.
Foreign producers sell less

Question 23

when a foreign supplier sells a good below the price it charges in its home country or its cost of production

Accepted Answer

Dumping

Question 24

Why does dumping happen?

Accepted Answer

Dumping is used to gain market share in foreign country or Undercut local competitors, even if it means losing money temporarily

Econ 201 chapter 19

International Trade

Question	Answer
the increased interdependence of economies around the globe. Countries are becoming more open to foreign trade and investment. The process of countries becoming more open to foreign trade and investment.	Globalization Factors driving globalization are: - Lower shipping and communication costs - Reduced trade barriers - Increased specialization
What are the factors that drive globalization?	Lower shipping and communication costs Reduced trade barriers Increased specialization
How would you characterize world trade in goods over the past 40 years? A. It has decreased dramatically. B. It has grown dramatically. C. It has decreased steadily. D. It has grown steadily	B. It has grown dramatically.
the total exports of final goods and services minus the total imports of final goods and services	Net exports (NX) NX = Exports - Imports
the difference between a nation’s total exports and total imports	Trade balance
When exports exceed imports, indicating a positive trade balance	Trade surplus Exports > Imports → NX > 0
When imports exceed exports, indicating a negative trade balance	Trade deficit Exports < Imports → NX < 0
the ability of an individual, a firm, or a country to produce a good at a lower opportunity cost than a competitor can	Comparative advantage
The highest-valued alternative that must be given up to engage in an activity.	Opportunity cost
industries rely heavily on machinery, equipment, and infrastructure rather than human labor	capital-intensive
industries depend more on human effort than on machinery	labor-intensive
Comparative advantage can derive from what sources?	Climate and natural resources Relative abundance of labor and/or capital Technological differences External economies
When do countries benefit from trade?	a country can acquire goods for a lower opportunity cost than if it had to produce them. It can sell a good for a higher opportunity cost than what it costs to produce it
INFORMATION Smaller countries get access to goods that require large-scale production. Access to new markets allows countries to take advantage of economies of scale and therefore lower per-unit costs as production expands.
Trade agreement between the United States, Mexico, and Canada	USMCA (formerly NAFTA)
Regulates the trade of various goods and services, including textiles, investment, intellectual property, and agriculture Also works to resolve trade disputes	World Trade Organization (WTO)
A blanket term for governmental actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition.	Protectionism
Two of the most common measures of protectionism are:	Tariffs and import quotas
Goods and services produced domestically but sold in other countries	Exports
Goods and services bought domestically but produced in other countries	Imports
A tax imposed by a government on imported goods and services.	Tariffs
Limits on the quantity of products that can be imported into a country	Quotas Function like tariffs, except that the government does not receive any revenue
What are the effects of tariffs?	Consumers pay more and buy less of the good. Domestic producers can sell more. Foreign producers sell less
when a foreign supplier sells a good below the price it charges in its home country or its cost of production	Dumping
Why does dumping happen?	Dumping is used to gain market share in foreign country or Undercut local competitors, even if it means losing money temporarily	Example: A Chinese manufacturer sells solar panels in the U.S. for $100 each, even though they cost $150 to produce and sell for $180 in China. That’s dumping.
INFORMATION If a government finds that dumping is being subsidized, it can impose countervailing duties: These are extra tariffs designed to offset the unfair advantage They protect domestic industries from being wiped out by cheap imports

"Know" box contains:
Time elapsed:
Retries: