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Economics > L2 : International Trade > Flashcards

L2 : International Trade Flashcards

1
Q

What is international trade?

A

The exchange of goods and services between countries.

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2
Q

True or False: International trade only involves physical goods.

A

False

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3
Q

What are exports?

A

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

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4
Q

What are imports?

A

Goods and services purchased from other countries.

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5
Q

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

A

exports; imports

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6
Q

What is a trade deficit?

A

When a country’s imports exceed its exports.

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7
Q

What is a trade surplus?

A

When a country’s exports exceed its imports.

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8
Q

What does WTO stand for?

A

World Trade Organization

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9
Q

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

A

True

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10
Q

What is the main purpose of tariffs?

A

To protect domestic industries by making imported goods more expensive.

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11
Q

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

A

tariff

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12
Q

What are quotas?

A

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

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13
Q

What is the primary benefit of international trade?

A

Access to a larger market and increased variety of goods.

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14
Q

What is comparative advantage?

A

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

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15
Q

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

A

True

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16
Q

What is the role of trade agreements?

A

To reduce trade barriers and promote trade between countries.

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17
Q

What is the difference between bilateral and multilateral trade agreements?

A

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

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18
Q

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

A

North American Free Trade Agreement (NAFTA)

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19
Q

What does FTA stand for?

A

Free Trade Agreement

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20
Q

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

A

True

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21
Q

What is an embargo?

A

A government order that restricts commerce with a specified country.

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22
Q

What is the main goal of trade liberalization?

A

To reduce or eliminate barriers to trade.

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23
Q

What is foreign direct investment (FDI)?

A

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

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24
Q

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

A

Investment climate

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25
Q

What is the purpose of export promotion?

A

To encourage domestic companies to sell their products abroad.

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26
Q

What is the main function of export credit agencies?

A

To provide financing and insurance to domestic companies exporting goods.

27
Q

True or False: Exchange rates can affect international trade.

A

True

28
Q

What is a floating exchange rate?

A

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

29
Q

What is a fixed exchange rate?

A

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

30
Q

What does the term ‘trade barriers’ refer to?

A

Government policies that restrict international trade.

31
Q

What is dumping in international trade?

A

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

32
Q

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

A

Heckscher-Ohlin

33
Q

What is the purpose of anti-dumping measures?

A

To protect domestic industries from unfair competition.

34
Q

What is the significance of trade statistics?

A

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

35
Q

What are trade sanctions?

A

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

36
Q

True or False: Trade liberalization leads to increased competition.

A

True

37
Q

What is the impact of globalization on international trade?

A

It has increased the volume and complexity of trade worldwide.

38
Q

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

A

To promote global monetary cooperation and financial stability.

39
Q

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

A

World Bank

40
Q

What is a trade bloc?

A

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

41
Q

What is the main characteristic of a common market?

A

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

42
Q

What is the purpose of trade facilitation?

A

To simplify and streamline international trade procedures.

43
Q

What does the term ‘trade finance’ refer to?

A

The financing of international trade transactions.

44
Q

True or False: Currency fluctuations can impact trade profitability.

A

True

45
Q

What is the significance of trade policy?

A

It determines how a country engages in international trade.

46
Q

What is the difference between visible and invisible trade?

A

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

47
Q

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

A

Trade agreements

48
Q

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

A

To promote international trade by reducing trade barriers.

49
Q

What is the main impact of tariffs on consumers?

A

Tariffs increase the prices of imported goods.

50
Q

What is the role of customs authorities?

A

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

51
Q

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

A

True

52
Q

What is a trade mission?

A

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

53
Q

What is the purpose of trade negotiations?

A

To reach agreements that facilitate trade between countries.

54
Q

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

A

Stolper-Samuelson

55
Q

What is the relationship between trade and economic growth?

A

Increased trade can lead to higher economic growth rates.

56
Q

What is the importance of trade relations?

A

They can enhance diplomatic ties and economic cooperation.

57
Q

What is the role of trade associations?

A

To represent the interests of businesses engaged in international trade.

58
Q

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

A

True

59
Q

What is a trade barrier?

A

Any regulation or policy that restricts international trade.

60
Q

What does the term ‘non-tariff barriers’ refer to?

A

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

61
Q

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

A

Export subsidies

62
Q

What is the effect of exchange rate volatility on trade?

A

It can create uncertainty and affect pricing strategies.

63
Q

What is the significance of trade balance?

A

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

64
Q

What are trade negotiations typically aimed at?

A

Reducing trade barriers and enhancing economic cooperation.

Economics (6 decks)

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