ECONOMICS
International Trade - Ch 17
1)
How do nations obtain goods and services for which they lack adequate resources?
Nations acquire necessary goods and services through trade.
2)
Why is a nation with abundant resources better off trading than being self-sufficient?
Trade allows that nation to specialize and produce the most goods at the lowest opportunity cost.
3)
Describe the similarities and differences among the following barriers to free trade:
All are means of preventing a foreign product or service from freely entering a country.
4)
5)
1.
Import Quotas: a limit on the amount of a good that can be imported
2.
VERS: a self-imposed limitation on the quantity of products a country ships to another country
3.
Tariffs: a tax on an imported good
Describe the three arguments in favor of protectionism.
1.
Shelters domestic jobs
2.
Encourages the growth of new industries
3.
Helps protect national security
Explain why you need to know the exchange rate when you travel to a foreign country.
Knowing the exchange rate is important because other countries do not use the U.S. dollar as their currency. It tells you
how much your dollars are worth and what your spending power will be.
6)
What is a trade deficit? How would you describe the current balance of trade in the United States?
A trade deficit occurs when a nation imports more than it exports. The United States has been experiencing a trade
deficit for several decades.
Week 9 of 9.
The 9th and last quiz towards your final.
International Trade - Ch 17
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6/8/12