International Trade

Question 1

What is international trade

Answer 1

The movement of goods services and investments across international borders

Question 2

advantages of international trade

Answer 2

Obtain goods and services that they can’t produce at all or in sufficient quantity

Obtain good and services at a lower prices form overseas

Trade leads to international specialization where allows for output increase and real GDP

Question 3

What is international specialization

Answer 3

Different countries have different resources (land capital about entrepreneurship) each country is more suitable to particular types of production.

Question 4

Definition of Absolute advantages

Answer 4

Absolute advantages means a country’s ability to produce particular goods more efficiently (using fewer resources and at a lower cost) Ghana some other countries

Question 5

What ability of a country can be called as absolute advantages

Answer 5

More of that good with the same resources

The same quantity of that goods using fewer resources

That goods with a lower production cost

Question 6

The definitions of competitive advantages

Answer 6

Means a country ‘s ability to produce goods at a lower cost than any other countries

Question 7

The formula of opportunity cost

Answer 7

Loss/gain

Question 8

The definition of The term of trade (TOT)

Answer 8

The quantity of goods which must be given up by one country to gain a given quantity of a product from another country.

Question 9

The formula of the term of trade

Answer 9

(export price index/import price index) *100

Question 10

Two situations of TOT

Answer 10

1. TOT improvement
   Export price increase or import price decrease
2. TOT deterioration
   Export price decrease or import price increase

Question 11

The definition of free trade

Answer 11

No artificial barriers imposed by the government upon the flow of goods and services across international borders

Question 12

The organization of the free trade

Answer 12

EU
European Union

NAFTA
North American free trade agreement

ASEAN
Association of southeastern Asia nations

Question 13

Advantages of free trade

Answer 13

More efficient allocation of resources

Increase global output

Higher national income, living standards

International specialization-best practice

Economic of scale in workers markets

Competition between local and foreign producers

Promotion of good relations between countries

Question 14

The definition of protectionism

Answer 14

The use of artificial barriers (quotas and tariffs) which restrict the free flow of goods and services in international trade

Question 15

What does government assistance aim at?

Answer 15

Government assistance aimed at giving local producers advantages over foreign competing industries

Question 16

What is trade barriers

Answer 16

Trade barriers are government polices or regulations that restrict international trade

Question 17

Main methods of trade protectionism

Answer 17

Tariffs
Quota
Embargo
Subsidies

Question 18

The definition of tariffs

Answer 18

A tariff is a tax on the imports

Question 19

the winner of tariffs

Answer 19

Domestic firms’ sales and price increase

Workers in domestic firm gain security and possible wages

Government gains revenue

Resources suppliers gain sales-allocation effect

Question 20

losers

Answer 20

consumers pay more for g&s 
Consumption quantity falls
Other industries-direct and indirect dost may increase 
Lead to inflation 
Importers sell less

Question 21

what is quota

Answer 21

Legal limit on the quantity of a particular good which can be imported. Restrict quantity supplies that can be imported

Question 22

The similarities of effects of tariffs and quota

Answer 22

Domestic price rises
Domestic production rises
Domestic purchases fall
Imports fall

Question 23

The difference of effects of tariffs and quota

Answer 23

Quota:no revenue of government
Tariffs: revenue of government

Question 24

The definition of Subsidies

Answer 24

Cash payments by government to domestic

Question 25

The effect of subsidies

Answer 25

Expense to government ( and taxpayers)

Consumers pay less

Works in the external economy as well can help export

Question 26

The effect of tariffs

Answer 26

Government gains revenue
Consumers pay more adds to inflation
Only effect in domestic market
Only blocks import

Question 27

The definition of embargo

Answer 27

Total ban on products from a particular country

Question 28

Infant industry

Answer 28

Is one that is in early stage of development and which Conor survive competitor from foreign companies

Question 29

strategic industry

Answer 29

Is one that is particularly important to a country ‘a economy

Question 30

Generic

Answer 30

A cheaper copy of a product that is not marked with the producer’s name

Question 31

Trademark

Answer 31

A name or symbol sharing that a product is made by a particular producer and which cannot be legally used by anyone else

Question 32

Dumping

Answer 32

Selling unwanted goods very cheaply , usually in other countries

Question 33

Copyright

Answer 33

The legal right to control the production and selling of a book play film photograph piece of music , etc

Question 34

Subsidize

Answer 34

To play part of the cost of agh

Question 35

What should a country produce described in competitive advantages

Answer 35

A country should produce (specialize in) that good in which it has the lower opportunity cost
Most efficient use of resources