L2 : International Trade

Question 1

What is international trade?

Answer 1

The exchange of goods and services between countries.

Question 2

True or False: International trade only involves physical goods.

Answer 2

False

Question 3

What are exports?

Answer 3

Goods and services produced in one country and sold to another.

Question 4

What are imports?

Answer 4

Goods and services purchased from other countries.

Question 5

Fill in the blank: The balance of trade is the difference between a country’s ______ and ______.

Answer 5

exports; imports

Question 6

What is a trade deficit?

Answer 6

When a country’s imports exceed its exports.

Question 7

What is a trade surplus?

Answer 7

When a country’s exports exceed its imports.

Question 8

What does WTO stand for?

Answer 8

World Trade Organization

Question 9

True or False: The WTO aims to facilitate smooth international trade.

Answer 9

True

Question 10

What is the main purpose of tariffs?

Answer 10

To protect domestic industries by making imported goods more expensive.

Question 11

Fill in the blank: A ______ is a tax imposed on imported goods.

Answer 11

tariff

Question 12

What are quotas?

Answer 12

Limits on the quantity of a specific good that can be imported.

Question 13

What is the primary benefit of international trade?

Answer 13

Access to a larger market and increased variety of goods.

Question 14

What is comparative advantage?

Answer 14

The ability of a country to produce a good at a lower opportunity cost than another country.

Question 15

True or False: Countries should specialize in goods where they have a comparative advantage.

Answer 15

True

Question 16

What is the role of trade agreements?

Answer 16

To reduce trade barriers and promote trade between countries.

Question 17

What is the difference between bilateral and multilateral trade agreements?

Answer 17

Bilateral agreements involve two countries, while multilateral agreements involve three or more countries.

Question 18

Fill in the blank: The ______ is an example of a multilateral trade agreement.

Answer 18

North American Free Trade Agreement (NAFTA)

Question 19

What does FTA stand for?

Answer 19

Free Trade Agreement

Question 20

True or False: Protectionism is the economic policy of restraining trade between countries.

Answer 20

True

Question 21

What is an embargo?

Answer 21

A government order that restricts commerce with a specified country.

Question 22

What is the main goal of trade liberalization?

Answer 22

To reduce or eliminate barriers to trade.

Question 23

What is foreign direct investment (FDI)?

Answer 23

Investment made by a company or individual in one country in business interests in another country.

Question 24

Fill in the blank: ______ is a measure of how well a country can attract and retain investment.

Answer 24

Investment climate

Question 25

What is the purpose of export promotion?

Answer 25

To encourage domestic companies to sell their products abroad.

Question 26

What is the main function of export credit agencies?

Answer 26

To provide financing and insurance to domestic companies exporting goods.

Question 27

True or False: Exchange rates can affect international trade.

Answer 27

True

Question 28

What is a floating exchange rate?

Answer 28

An exchange rate determined by the market forces of supply and demand.

Question 29

What is a fixed exchange rate?

Answer 29

An exchange rate that is set and maintained by a government.

Question 30

What does the term 'trade barriers' refer to?

Answer 30

Government policies that restrict international trade.

Question 31

What is dumping in international trade?

Answer 31

Selling goods in a foreign market at a price lower than their normal value.

Question 32

Fill in the blank: The ______ theory explains how trade can benefit all countries involved.

Answer 32

Heckscher-Ohlin

Question 33

What is the purpose of anti-dumping measures?

Answer 33

To protect domestic industries from unfair competition.

Question 34

What is the significance of trade statistics?

Answer 34

They provide insights into a country's trade patterns and economic health.

Question 35

What are trade sanctions?

Answer 35

Restrictive measures imposed by a country against another country to influence its behavior.

Question 36

True or False: Trade liberalization leads to increased competition.

Answer 36

True

Question 37

What is the impact of globalization on international trade?

Answer 37

It has increased the volume and complexity of trade worldwide.

Question 38

What is the role of the International Monetary Fund (IMF) in international trade?

Answer 38

To promote global monetary cooperation and financial stability.

Question 39

Fill in the blank: The ______ is a global organization that provides loans to countries for development projects.

Answer 39

World Bank

Question 40

What is a trade bloc?

Answer 40

A group of countries that work together to promote trade among themselves.

Question 41

What is the main characteristic of a common market?

Answer 41

The free movement of goods, services, capital, and labor among member countries.

Question 42

What is the purpose of trade facilitation?

Answer 42

To simplify and streamline international trade procedures.

Question 43

What does the term 'trade finance' refer to?

Answer 43

The financing of international trade transactions.

Question 44

True or False: Currency fluctuations can impact trade profitability.

Answer 44

True

Question 45

What is the significance of trade policy?

Answer 45

It determines how a country engages in international trade.

Question 46

What is the difference between visible and invisible trade?

Answer 46

Visible trade involves tangible goods, while invisible trade involves services.

Question 47

Fill in the blank: ______ are agreements between two or more countries to reduce tariffs and other trade barriers.

Answer 47

Trade agreements

Question 48

What is the main objective of the General Agreement on Tariffs and Trade (GATT)?

Answer 48

To promote international trade by reducing trade barriers.

Question 49

What is the main impact of tariffs on consumers?

Answer 49

Tariffs increase the prices of imported goods.

Question 50

What is the role of customs authorities?

Answer 50

To regulate the flow of goods into and out of a country.

Question 51

True or False: Free trade can lead to job losses in certain industries.

Answer 51

True

Question 52

What is a trade mission?

Answer 52

A trip taken by business leaders to promote trade and investment opportunities.

Question 53

What is the purpose of trade negotiations?

Answer 53

To reach agreements that facilitate trade between countries.

Question 54

Fill in the blank: The ______ effect refers to the impact of trade on income distribution within a country.

Answer 54

Stolper-Samuelson

Question 55

What is the relationship between trade and economic growth?

Answer 55

Increased trade can lead to higher economic growth rates.

Question 56

What is the importance of trade relations?

Answer 56

They can enhance diplomatic ties and economic cooperation.

Question 57

What is the role of trade associations?

Answer 57

To represent the interests of businesses engaged in international trade.

Question 58

True or False: Trade can help in the transfer of technology between countries.

Answer 58

True

Question 59

What is a trade barrier?

Answer 59

Any regulation or policy that restricts international trade.

Question 60

What does the term 'non-tariff barriers' refer to?

Answer 60

Trade restrictions that do not involve tariffs, such as quotas and standards.

Question 61

Fill in the blank: ______ can be used to promote exports by providing financial assistance to exporters.

Answer 61

Export subsidies

Question 62

What is the effect of exchange rate volatility on trade?

Answer 62

It can create uncertainty and affect pricing strategies.

Question 63

What is the significance of trade balance?

Answer 63

It provides insights into a country's economic performance and competitiveness.

Question 64

What are trade negotiations typically aimed at?

Answer 64

Reducing trade barriers and enhancing economic cooperation.