CH 9

Question 1

import

Answer 1

buy goods/services from foreign sellers

Question 2

export

Answer 2

sell goods/services to foreign buyers

Question 3

trade costs

Answer 3

the extra costs incurred as a result of buying/selling your goods internationally vs domestically

Question 4

tariffs

Answer 4

taxes on imported goods; increase trade costs

Question 5

import quotas

Answer 5

limit the quantity of a good that can be imported

Question 6

exchange rates

Answer 6

set conditions under which decisions are made and under which trade takes place; the ratio at which two currencies are traded; the price of one currency in terms of another

Question 7

trade balance

Answer 7

trade surplus + trade deficit

Question 8

protection

Answer 8

when the government inhibits free trade among nations

Question 9

tax revenue

Answer 9

amount of the tariff times the number of imports

Question 10

quota rents

Answer 10

government gives away tariff revenues when they use a quota

Question 11

Voluntary export restraints

Answer 11

when the exporting economy voluntarily reduces exports to the importing country

Question 12

dumping/antidumping

Answer 12

a firm/industry’s sale of products at prices below the cost of production; other countries’ producers may lower price cost w/ the intent of driving domestic firms out of the market and then increasing price