Chapter 5 – International Trade

Question 1

imports

Answer 1

refers to goods that a country buys from another country

Question 2

exports

Answer 2

are goods that a country sells to another

Question 2

Globalisation

Answer 2

phenomenon of growing economic linkages among countries

Question 3

Hyperglobalisation

Answer 3

phenomenon of extremely high levels of international trade

Question 4

The Richardian model of international trade

Answer 4

by introducing the principle of comparative advantage, it offers some of the most compelling reasons supporting international trade.

Question 5

Autarky

Answer 5

which a country does not trade with another country.

Question 6

Hekscher-Ohlin model

Answer 6

a country has a comparative advantage in a good whose production is intensive in the factors that are abundantly available in that country.

Question 7

free trade

Answer 7

when the government does not attempt to either reduce or to increase the levels of exports and imports that occur naturally as a result of supply and demand.

Question 8

tariff

Answer 8

a tax levied on imports.

Question 9

An import quota

Answer 9

a legal limit on the quantity of a good that can be imported

Question 10

Offshore outsourcing

Answer 10

when businesses hire people in another country to perform various tasks.