The US And World Trade

Question 1

What is the basic concept that makes trade necessary between nations or within a nation?

Answer 1

Law of Comparative Advantage

Question 2

When all nations have a different combination of resources economists call this an unequal __________ of productive resources.

Answer 2

Endowment

Question 3

Developing one product over others is called what?

Answer 3

Specialization

Question 4

Nations specialize in products made from the resources which are ___________ in the nation.

Answer 4

Abundant

Question 5

In order for trade to occur, the surplus of goods must be priced ___________ than a potential trading partner can produce the product itself.

Answer 5

Cheaper

Question 6

It is highly probable that a nation with an abundance of a resource is going to have a what?

Answer 6

Cost advantage

Question 7

The basic advantage of trade is that scarce resources can be used to their best ____________. Which means efficiency.

Answer 7

Advantage

Question 8

A second advantage of trade would be that the standard of living of both trading partners does what?

Answer 8

Increases

Question 9

Attempts at self sufficiency commit scarce resources in ___________ production.

Answer 9

Insufficient

Question 10

Buying inefficient production reduces what?

Answer 10

The standard of living

Question 11

Trade between nations enhances __________ and standard of living.

Answer 11

Efficiency

Question 12

Virtually every nation in the world has legislation that removes some ___________ from international trade.

Answer 12

Freedom

Question 13

What is one of the most common type of barriers that restricts trade?

Answer 13

A tariff

Question 14

What is an import tax on a good?

Answer 14

Tariff

Question 15

Another trade barrier is an import _______.

Answer 15

Quota

Question 16

What limits the number of goods entering a country?

Answer 16

Import Quota

Question 17

An extreme type of import quota is what?

Answer 17

An embargo

Question 18

An embargo stops ______ trade of a particular product.

Answer 18

All

Question 19

What exists when the process of securing the rights to import a product is so laborious businesses don’t bother?

Answer 19

Administrative barrier

Question 20

Trade barriers _________ the price of goods and services in the US.

Answer 20

Increase

Question 21

One reason we restrict trade is purely __________. If we don’t approve of a nation, we don’t trade with them.

Answer 21

Political

Question 22

The reason for trade barriers are not ___________ in the first place.

Answer 22

Economic

Question 23

A second justification for trade barriers is to restrict the flow of some goods in the US because they are dangerous to the _________ of our population.

Answer 23

Health

Question 24

A third justification for trade barriers is because we must always have the capability to maintain security through an adequate __________ System.

Answer 24

Defense

Question 25

To avoid problems of importing weapons, the US relies on domestic producers for what?

Answer 25

Military needs

Question 26

The forth justification for trade barriers is industry needs ____________.

Answer 26

Protection

Question 27

By protecting industry from cheaper imports, citizens are forced to pay higher prices reducing what?

Answer 27

Standard of living

Question 28

An industry in the very early development stages is considered what?

Answer 28

Infant industry

Question 29

Infant industry demands __________.

Answer 29

Protection

Question 30

The final justification for trade barriers most often used is to protect ______ in the US.

Answer 30

Jobs

Question 31

People prefer less expensive product in similar quality over __________ Product.

Answer 31

Domestic

Question 32

Another factor effecting the flow of trade is the value of the nations ___________.

Answer 32

Currency

Question 33

The stronger a currency is relative to another nations currency, the more _________ a nation has.

Answer 33

Imports

Question 34

A strong currency will reduce __________.

Answer 34

Exports

Question 35

As a nations currency weakens, exports will _____ but imports will ______.

Answer 35

Rise Fall

Question 36

The Federal Reserve System cooperates with other central banks to regulate big swings in currency _______ so _______ can continue to flow.

Answer 36

Values Trade

Question 37

What states that nations are able to produce some products cheaper than others due to unequal distribution of productive resources?

Answer 37

Law of Comparative Advantage

Question 38

Any legislation that obstructs a nation from exploiting its comparative advantage is a what?

Answer 38

Trade barrier

Question 39

The value of one nations currency in terms of another nations currency is what?

Answer 39

Exchange rates