International Trade, Chapter 26.1

International Trade, Chapter 26.1
Essential Idea:
1. Does any country produce EVERYTHING it needs? ________
2. _____________- a good that is sold to another country
a. In 2005, about ____ percent of all goods in the United States were
b. What is an example of an exported good?
3. ______________- a good that is purchased from another country.
a. What is an example of an imported good?
4. Trade is one way that nations help solve the problem of ______________.
a. We also trade within our own country. This is why people in
_______________ can eat ______________.
5. Why else do we trade? Some countries can make goods at a ________ cost than
a. This is called _________________________.
i. For example, _____________ can make textiles cheaper than the
United States, so we buy textiles from _____________ rather than
make them ________________.
6. Because of comparative advantage, countries can ___________________ in what
products they make.
7. Factors of production
a. The factors of production impact comparative advantage.
b. _________________
i. Saudi Arabia has a comparative advantage with ______ and the
United States has a comparative advantage with ____________.
c. ________________ and _________________
i. The United States has a comparative advantage because we have a
lot of __________________ and ___________________. We also
_________ more than people in many other countries.
8. International trade also provides ___________.
a. Instead of making cars for just ____________________, workers can
make cars for _____________________ as well.
Trade Restrictions
1. Who loses business when we import goods from other countries?
2. ____________ and ______________ are used to protect our own industries.
3. _____________ are taxes placed on imported goods. This keeps
_______________ prices and ______________ prices competitive.
4. ____________________ limit how much of a product can be imported. This
way, more people will buy _________________-made products.
Free Trade
5. Most policymakers think that the __________ of trade barriers outweigh the
____________. Many countries, therefore, aim to achieve _________________.
6. Countries use __________________________ to achieve free trade.
7. _______________________
a. An organization of independent _______________ nations.
b. Today, members of the European Union are even closer because they
share a common _____________, known as the ________.
8. ____________________________
a. In the 1990s, ______________________, ___________________, and
__________________ signed the
b. Is NAFTA a good or bad thing?
i. Why bad?
ii. Why good?
c. ____________________
i. The ________ is an _______________________ organization that
regulates _________ between countries.
Balancing Trade
1. If the value of a country’s _________________ decreases, it increases
___________, because they can make goods cheaper than other countries.
2. The balance of trade is the difference between the values of a country’s
_________ and _____________.
3. If you ________________ more than you _______________, you have a
4. If you ________________ more than you _______________, you have a
5. Does the United States have a trade surplus or deficit? __________________