Econ Intern Trade + Develop

Question 1

Free trade

Answer 1

Eliminates barriers to trade

Question 2

Protectionism

Answer 2

Set of gov policies that protect domestic employment

Question 3

Arguments for protectionism

Answer 3

Domestic employment
Prevent dumping 
Protect low-cost labor
Infant industries
Avoid over-specialization

Question 4

Against protectionism

Answer 4

Higher prices
Less choice
Reduced efficiency and specialization
Reduced competition/innovation

Question 5

Tariff

Answer 5

Tax on imported goods

Question 6

Subsidies

Answer 6

Payment per unit of output from the government to a firm

Question 7

Quota

Answer 7

Physical limit on quantity and/or value of good/service that can be imported into a country

Question 8

Embargo

Answer 8

Ceasing/banning all trade to another country

Question 9

Exchange rates

Answer 9

Value of one currency expressed in terms of another

Question 10

Fixed currencies

Answer 10

Currency depends on commodities or other currencies

Question 11

Floating currency

Answer 11

Value of currency is depended upon exchange rates and money supply

Question 12

Foreign Direct Investment (FDI)

Answer 12

Long-term investment by multi-national corporations in countries overseas

Question 13

Econ integration

Answer 13

Describes process where by countries coordinate and link their econ policies

Question 14

Trading bloc

Answer 14

Group of countries that join together in order to increase trade between themselves and/or to gain econ benefits from cooperation on some level

Question 15

Why countries trade

Answer 15

Lower prices
Greater choice
Different resources