Name __________________________________________ Hour: _______ Row: _______
Chapter 3 – Business in the Global Economy – Review Guide
Principles of Business
The following vocabulary words should be entered into your Study Blue account, along with definitions from your notes or
textbook. Your teacher will guide you through the steps for setting up a Study Blue account. When you complete the entry of
these words and definitions into Study Blue, print a page that lists all vocabulary terms and definitions, and staple it to this
review.
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Absolute Advantage
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Balance
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Favorable Balance of Payments
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Unfavorable Balance of Payments
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Balance of Trade
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Barrier
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Comparative Advantage
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Common Market (Definition & advantages)19.
Culture
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Currency
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Cycle
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Debt
Deflation
Domestic Business
Embargo
Exchange Rate
Export
Foreign/International Trade
Import
Inflation
Infrastructure
Interest
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International Business
Opportunity Cost
Profit
Quota
Scarcity
Tariff
Trade Deficit
Trade Surplus
Unemployment
Using your notes or textbook, answer the following questions from Chapter 3.
1. Describe the difference between a trade surplus and a trade deficit.
2. Describe the difference between a positive (favorable) balance of trade and a negative (unfavorable) balance of
trade.
3. List some (2-3) reasons a country might impose a tariff.
4. List some (2-3) reasons a country might impose a quota.
5. List some (2-3) reasons a country might impose an embargo.
6. What is the difference between an absolute advantage and a comparative advantage?
7. Tariffs, quotas, and embargoes are formal trade barriers. What are informal trade barriers and how are they
established?
8. Generally speaking, does the United States have more imports or exports?
9. What are some of the United States’ main exports?
10. List some examples of a nation’s infrastructure.
11. How is it possible for the Unites States to have a trade surplus with one country and a trade deficit with another?
Provide specific examples.
12. Why do we import goods?
13. How can importing goods be helpful to our economy?
14. How can importing goods be harmful to our economy?
15. What do the letters NAFTA stand for?
16. What nations are included in NAFTA and what is the purpose of this organization?
17. What is a free-trade zone and why are free trade zones established?
18. The United States trades with how many countries?
19. What key factors affect the level of a country’s economic development?
20. List and define the four components of the international business environment.
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2)
3)
4)
21. What factors affect the value of a nation’s currency?
22. Suppose you want to make a currency exchange for 25 British pounds. You must exchange 43.75 US dollars to
get the 25 pounds. In this scenario, what is the value of 1 pound, in relation to the US dollar?