Deck 18: International Trade

Question 1

Circle the letter that corresponds to the best answer. The Chinese economic expansion since the early 1980s and the Japanese economic expansion from the late 1940s through the 1980s were __________.

A) virtually identical
B) both dependent on the American market
C) based in the economic principles of Karl Marx
D) based on closing their domestic markets to American goods and services

Answer 1

Trade Deficit :
Trade deficit refers to the situation where country's trade balance is running in deficit because its import exceeds its export.
The trading has begun in country C in the year mid - 1970s. Although country US exports to country C are rapidly growing and the exports are only about one sixth of the imports. The biggest trade issues between the country C and the country US is that thousands of the country C factories are controlled by the country C officers.
From the late 1940s through the early 1980s the country C economic expansion and the country J economic expansion were dependent on the country A market.
Hence, the correct option is (b).
From the late 1940s through the early 1980s the country C economic expansion and the country J economic expansion were not virtually identical, are not based on the economic principles and are not based on the closing domestic markets to country A goods and services.
Hence, the options (a), (c) and (d) are not correct.
Therefore, the correct option is

Question 2

Circle the letter that corresponds to the best answer. The least applicable argument for protecting American industry from foreign competition would be the argument.

A) national security
B) infant industry
C) low-wage
D) employment

Answer 2

The trading has begun in country China in the year mid - 1970s. Although country US exports to country China are rapidly growing and the exports are only about one sixth of the imports. The biggest trade issues between the country China and the country US is that thousands of the country China factories are controlled by the country China officers.
National Security :
National Security can be defined as the requirement that is required to maintain the survival of the state through the rise of the economic power.
National security is not the least applicable argument for protecting Country A industry.
Hence, option (a) is not correct.
Wages:
Wages can be defined as the remuneration that is paid by an employer to an employee in exchange for the work.
The least applicable argument for protecting country A industry from foreign competition would be the low wage argument.
Hence, the correct option is (b).
Infant industry :
The basis of this argument lies in the fact that new(infant) industries do not have the economies of scale to compete with the older companies from other countries.
Infant Industry is not the least applicable argument for protecting Country A industry.
Hence, option (c) is not correct.
Employment:
Employment can be defined as the relationship between two parties which is based on contract where employees work in return for money.
Employment is not the least applicable argument for protecting Country A industry.
Hence, option (d) is not correct.
Therefore, the correct option is
.

Question 3

Circle the letter that corresponds to the best answer. Which statement is true about how globalization has affected American workers?

A) The only jobs that have been lost or will be lost are blue-collar factory jobs.
B) Most workers who have lost their jobs because of globalization have ended up in better paying jobs.
C) Until now a relatively high proportion of Americans performed high-skill, well-paying jobs, while a relatively high proportion of Chinese performed low-skill, poorly paying jobs.
D) Globalization cannot be considered a threat to the livelihoods of highly skilled, well-paid American workers.

Answer 3

Globalization :
Globalization can be defined as the organizations which has developed international relations or starts business in an international scale.
Globalization is a scenario when whole world becomes a single marketplace and countries are allowed to trade with each other and global corporations are those who sell their products and have operations in more than one country.
During globalization not much jobs are lost which has affected the country A workers.
Hence, the option (a) is not correct.
During globalization not many workers have lost their jobs.
Hence, option (b) is not correct.
During globalization the affect that has been caused to country A workers are relatively high proportion and perform high skill while the country C perform low skill poorly paying jobs.
Hence, option (c) is correct.
Globalization can be considered as a threat to the livelihoods of high skilled and well played country A workers.
Hence, option (d) is not correct.
Therefore, the correct option is

Question 4

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Chile will trade for __________.

Question 5

Practical Application: Can you think of any valid reason for tariff protection? Try to make a case for it.

Question 6

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) The United States can be described as a purely free trading nation.
B) The United States is one of the most protectionist nations in the world.
C) The rich nations provide hundreds of billions of dollars in agricultural subsidies to the poorer nations.
D) The United States provides smaller agricultural subsidies than does Japan and the European Union.

Question 7

What would you suggest we do to reduce our trade deficit?

Question 8

A tariff is a tax on _________; a quota is a limit on ____________.

Question 9

Circle the letter that corresponds to the best answer. Which statement is true?

A) Comparative advantage is not necessary for trade to take place, but absolute advantage is.
B) Absolute advantage is not necessary for trade to take place, but comparative advantage is.
C) Both absolute and comparative advantage are necessary for trade to take place.
D) Neither absolute nor comparative advantage is necessary for trade to take place.

Question 10

The basis for international trade is _____________
Use Figure 1 to answer questions 2 and 3.
F igure 1

Question 11

It would greatly reduce our trade deficit the most if we could curb our import of ____________

Question 12

Circle the letter that corresponds to the best answer. Imports would be lowered by ________.

A) tariffs only
B) import quotas only
C) both tariffs and import quotas
D) neither tariffs nor import quotas

Question 13

Circle the letter that corresponds to the best answer. Which statement is true?

A) There are basically no arguments that can be made on behalf of trade protection.
B) The arguments for trade protection are more valid than the arguments for free trade.
C) The United States has had a record of fully supporting free trade since the early 20th century.
D) Much of what we import has been produced by "sweatshop labor."

Question 14

Circle the letter that corresponds to the best answer. Our balance of trade __________.

A) has always been positive
B) turned negative in the mid-1970s
C) turned negative in the mid-1980s
D) has always been negative

Question 15

Circle the letter that corresponds to the best answer. Which statement is false?

A) No nation will engage in trade with another nation unless it will gain by that trade.
B) The terms of trade will fall somewhere between the domestic exchange equations of the two trading nations.
C) Most economists advocate free trade.
D) None of the above.

Question 16

Web Activity: How much were our imports, exports, and trade deficit during the last year? Go to www.bea.gov, click on "Survey of Current Business" at the left, then go to "National Data," "National Income and Product Accounts," "NIPA tables," "Domestic Product and Income," and finally, "Gross Domestic Product."

Question 17

Circle the letter that corresponds to the best answer. In order for trade between two countries to take place, __________.

A) absolute advantage is necessary
B) comparative advantage is necessary
C) both absolute and comparative advantage are necessary
D) neither absolute nor comparative advantage is necessary

Question 18

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Bolivia has a comparative advantage in the production of which metal?

Question 19

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Paraguay exports $21 billion of goods and imports $25 billion of goods. It exports $15 billion of services and imports $13 billion of services. Find the nation's (a) balance of goods, (b) balance of services, and (c) balance of trade.

Question 20

__________ was the last year in which we ran a trade surplus.

Question 21

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Americans are very willing to buy domestically produced goods, even if they are more expensive than imported goods.
B) We import more foreign goods than we did 40 years ago, but merchandise imports are still about the same percentage of our GDP.
C) In the decades following World War II, the Japanese consumer has strongly favored domestically manufactured goods over imports.
D) America has maintained its technological lead.

Question 22

Explain what comparative advantage is. Make up an example to illustrate this concept.

Question 23

We run huge trade imbalances with two countries. Explain the cause of the imbalances.

Question 24

Circle the letter that corresponds to the best answer. Of these three choices-tariffs, quotas, and free trade-economists like __________ the most and _________ the least.

A) tariffs, quotas
B) tariffs, free trade
C) free trade, tariffs
D) free trade, quotas
E) quotas, free trade
F) quotas, tariffs

Question 25

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Our economy would be much better off if the entire globalization process were reversed.
B) The globalization process creates billions of winners and no losers.
C) The process of globalization could easily be reversed if Congress and the president were willing to act.
D) Globalization ensures a more efficient allocation of resources throughout the world.

Question 26

Brazil is better at producing ___________ than at producing _____________.
Argentina is better at producing ____________ than at producing ___________.

Question 27

Our trade deficit in 2012 was $ ______________.

Question 28

Circle the letter that corresponds to the best answer. Our biggest annual trade deficit in our history was more than ________ billion.

A) $ 300
B) $400
C) $500
D) $600
E) $700

Question 29

Circle the letter that corresponds to the best answer. What accounts for the sharp fall in our trade deficit in 2009?

A) Our imports fell more than our exports.
B) Our exports fell more than our imports.
C) The recession was much worse in the rest of the world than in the United States.
D) The American consumer made a much greater effort to buy American products to keep jobs in the United States.

Question 30

Circle the letter that corresponds to the best answer. Which makes the most sense economically?

A) individual self-sufficiency
B) national self-sufficiency
C) national specialization
D) none of the above

Question 31

Circle the letter that corresponds to the best answer. Our largest trade deficit is with __________.

A) Japan
B) Canada
C) China
D) Mexico
E) Germany

Question 32

Circle the letter that corresponds to the best answer. Which country regularly counterfeits American goods and services, a practice that costs American industry over $200 billion a year?

A) Mexico
B) Canada
C) China
D) Japan

Question 33

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Chile has a comparative advantage in the production of which metal?

Question 34

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Nigeria has a positive trade balance of $10 billion. If it has a negative balance of services of $8 billion, how much is its balance of goods?

Question 35

Circle the letter that corresponds to the best answer. Which is the most accurate statement with respect to our chemical industry?

A) It is on the decline and now contributes to our balance of trade deficit.
B) It is large and growing.
C) It generally provides a trade surplus of about $20 billion a year.
D) It will almost completely disappear before 2020.

Question 36

What is wrong with having tariffs and quotas? Which is the lesser of the two evils, and why?

Question 37

Should we be worried about our trade deficit? Explain why or why not.

Question 38

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Globalization, on balance, has been very bad for the U.S. economy.
B) All the effects of globalization have been very good for the U.S. economy.
C) The best way to reduce our trade deficit is for Congress to pass a law requiring that we buy only American products.
D) Each of our recent presidents has basically supported the concept of free trade.

Question 39

If 1 ton of steel could be traded for 1 ton of wheat, Brazil would trade its _________ for Argentina's ______________.

Question 40

If our trade deficit with China and Japan were 0, our total trade deficit would be reduced by almost $ __________ billion.

Question 41

Circle the letter that corresponds to the best answer. Our trade deficit with China in 2012 was ____________.

A) under $100 billion
B) between $100 billion and $200 billion
C) between $200 billion and $300 billion
D) over $300 billion

Question 42

Circle the letter that corresponds to the best answer. Which statement do you agree with?

A) There are several problems causing our huge trade deficit; there are no easy solutions to these problems.
B) We could quickly eliminate our trade deficit by raising tariffs.
C) The main reason we have a large trade deficit is that foreigners refuse to buy American goods and services.
D) The main reason for our large trade deficit is our relatively low rate of economic growth.

Question 43

Circle the letter that corresponds to the best answer. Which of the following does not contribute to our huge trade deficit?

A) our dependence on automobile travel
B) our addiction to consumer goods
C) our shrinking manufacturing base
D) our huge oil imports
E) none of the above

Question 44

Circle the letter that corresponds to the best answer. Statement 1: Our trade deficit with China is larger than our trade deficit with Japan.
Statement 2: Americans pay lower taxes on gasoline than do the citizens of most of the nations in Western Europe.

A) Statement 1 is true, and statement 2 is false.
B) Statement 2 is true, and statement 1 is false.
C) Both statements are true.
D) Both statements are false.

Question 45

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Bolivia will trade ________ for ________.

Question 46

Assume Bolivia and Chile use the same amount of resources to produce tin and copper. Figure 2 represents their production possibilities curves. Use it to answer problems 1 through 4.
F igure 2

Algeria has a negative trade balance of $7 billion. If it has a positive balance of goods of $10 billion, how much is its balance of services?

Question 47

Circle the letter that corresponds to the best answer. Of the following, our imports of ___________ contribute most to our trade deficit.

A) oil
B) clothing
C) textiles
D) consumer electronics

Question 48

Explain why globalization is good for the United States. What are the drawbacks of globalization for our economy?

Question 49

What is the economist's case for free trade?

Question 50

Circle the letter that corresponds to the best answer. Which of the following would best describe our trading relationship with China five years from now?

A) Our trade deficit will be higher and we will be importing a higher proportion of "low-skill" products.
B) Our trade deficit will be higher and we will be importing a higher proportion of "high-skill" products.
C) Our trade deficit will be lower and we will be importing a higher proportion of "low-skill" products.
D) Our trade deficit will be lower and we will be importing a higher proportion of "high-skill" products.

Question 51

___________ is the country with which we have the largest trade imbalance.

Question 52

The law of comparative advantage states that total output is greatest when each product is made by the country that has the __________.

Question 53

Circle the letter that corresponds to the best answer. Which statement is the most accurate?

A) Globalization has made some people winners and others losers.
B) Globalization has been good for everyone involved.
C) Globalization has been bad for everyone involved.
D) Virtually all economists believeå that globalization has almost no downside.