Question 1

Which of the following organizations has over 130 member nations and oversees the General Agreement on Trade and Tariffs (GATT)?

Accepted Answer

The World Trade Organization (WTO) has over 130 member nations and oversees the General Agreement on Trade and Tariffs (GATT). The United Nations (UN) is a separate organization that deals with international cooperation on various issues. NAFTA is a regional trade agreement between the United States, Canada, and Mexico. The EU is a political and economic union of member states in Europe. APEC is a regional forum of 21 member economies in the Asia Pacific region.

Question 2

In 2011, 60% of goods imported by the United States came from just seven nations. Which of the following nations was one of those seven?

Accepted Answer

The question asks for one of the seven nations that accounted for 60% of goods imported by the United States in 2011. Among the given options, the United Kingdom is a well-known exporter of goods to the United States and is also one of the largest trading partners of the US. Therefore, the best choice is B, United Kingdom. The other options, Australia, Argentina, India, and France, may also have exported goods to the US but were not part of the top seven nations that accounted for 60% of imports.

Question 3

Trade deficit is:

Accepted Answer

The answer of Trade deficit is:
...

Question 4

The ability of one person or nation to produce a good at a lower opportunity cost than another is called a(n):

Accepted Answer

The ability to produce a good at a lower opportunity cost than another is called comparative advantage. This is different from absolute advantage, which is simply the ability to produce more of a good than another producer. Specialization advantage and specific advantage are not commonly used terms in economics. Market advantage could refer to a variety of factors such as branding or location.

Question 5

The combination of goods and services Mexico's citizens might feasibly consume is called Mexico's:

Accepted Answer

The answer of The combination of goods and services Mexico's...

Question 6

Trade surplus is:

Accepted Answer

The answer of Trade surplus is:
...

Question 7

In 2011, 60% of goods imported by the United States came from just seven nations. Which of the following nations was NOT one of those seven?

Accepted Answer

According to the information given in the question, 60% of goods imported by the United States came from just seven nations. The question does not provide any further details about which nations were part of this list. However, we can eliminate one option based on general knowledge: Australia. While Australia is a trading partner with the United States, it is not one of the top seven nations that account for 60% of US imports. Therefore, the correct answer is A) Australia.

Question 8

Citizens can consume the largest quantities of goods and services in which of the following situations?

Accepted Answer

In an open economy, citizens can consume the largest quantities of goods and services because it allows for trade with other countries, increasing the variety and quantity of goods and services available.

Question 9

Which country has the world's biggest economy?

Accepted Answer

The United States has the world's biggest economy. According to the International Monetary Fund, in 2020, the GDP of the United States was $21.44 trillion, which was the highest in the world. China is the country with the second-largest economy in the world, with a GDP of $14.14 trillion in 2020.

Question 10

If a society's consumption possibilities are identical to its production possibilities, that society has a(n):

Accepted Answer

If a society's consumption possibilities are identical to its production possibilities, then it is unable to engage in trade with other societies. This is the definition of a closed economy.

Question 11

Which of the following trade agreements is a binding agreement to reduce trade barriers between 18 Asian nations?

Accepted Answer

The Asia Pacific Economic Cooperation (APEC) is a binding agreement between 21 Pacific Rim countries, including 18 in Asia, aimed at reducing trade barriers and promoting economic cooperation.

Question 12

Since 2000, world goods trade has:

Accepted Answer

According to data from the World Trade Organization, world goods trade has almost doubled since 2000.

Question 13

Which two countries buy the most U.S. exports?

Accepted Answer

According to the U.S. Census Bureau, as of 2020, Canada is the top importer of U.S. exports, accounting for 17.8% of all U.S. exports. Mexico is the second-highest importer, accounting for 15.7% of all U.S. exports. Therefore, the correct answer is C, Canada and Mexico.

Question 14

For nearly four decades, the United States has had a:

Accepted Answer

The United States has had a trade deficit for nearly four decades, meaning that it imports more goods and services than it exports. This has been a controversial issue, with some arguing that it leads to job losses and economic harm, while others argue that it allows the U.S. to import goods at a cheaper cost and allows for greater consumer choice.

Question 15

Which of the following trade agreements provides for the development of a single market among its members?

Accepted Answer

The European Union provides for the development of a single market among its members, allowing for the free movement of goods, services, capital, and people within its borders. The other trade agreements listed do not have the same level of integration and harmonization of policies among their members.

Question 16

In recent years, the United States has:

Accepted Answer

The United States has consistently exported more services abroad than it has imported, reflecting its competitive advantage in sectors such as finance, technology, and entertainment.

Question 17

Trade balance is:

Accepted Answer

Trade balance is the difference between a nation's total exports and total imports. It is calculated by subtracting imports from exports. If a nation exports more than it imports, it has a trade surplus, and if it imports more than it exports, it has a trade deficit. The trade balance is an essential economic indicator that reflects a country's economic strength and competitiveness.

Question 18

The ability of one person or nation to produce more of a good while using the same quantity of resources as another is called a(n):

Accepted Answer

The answer of The ability of one person or nation...

Question 19

In the past decade, companies like Nike and Under Armour have set up manufacturing centers in Nicaragua in part due to the country's establishment of _____________, allowing these companies to avoid standard corporate tax rates.

Accepted Answer

Free zones are designated areas in a country where businesses can operate with minimal restrictions and are exempt from certain taxes and regulations. Nicaragua has established free zones to attract foreign investment and promote economic growth. Companies like Nike and Under Armour have taken advantage of these zones to set up manufacturing centers and benefit from tax exemptions.

Question 20

What does NAFTA stand for?

Accepted Answer

NAFTA stands for North American Free Trade Agreement.

Quiz 19: International Trade

Which of the following organizations has over 130 member nations and oversees the General Agreement on Trade and Tariffs (GATT) ?