4.3 Globalization & International Trade

Multiple Choice

Which of the following is NOT a characteristic of globalization?

• Free flow of goods, services, capital

• Reduced trade barriers

• Isolation of economies

• Technological connectivity

Fill in the Blank

According to Ricardo, countries should specialize in producing goods where they have the lowest ___ cost.

Multiple Select

Which of the following statements about Adam Smith's and David Ricardo's trade theories are correct?

• Adam Smith believed in absolute advantage.

• David Ricardo introduced the concept of comparative advantage.

• Both economists were from the same country.

• Ricardo's theory allows for mutual benefit even if one country is better at producing everything.

Multiple Choice

Which of the following is a benefit of specialization according to the theories discussed?

• Higher efficiency and productivity

• Increased trade barriers

• Decreased variety of goods

• Economic isolation

Multiple Choice

Which of the following is a benefit of international trade for consumers?

• Lower prices

• Larger markets

• Economies of scale

• Access to resources and technology

Fill in the Blank

Fill in the blank: Tariffs are taxes on ___ goods.

Multiple Choice

What is the main purpose of quotas as a trade barrier?

• To limit the quantity of imports

• To raise prices for consumers

• To provide access to technology

• To improve economic accounts

Open Ended

Describe a scenario in which a country might impose an embargo and explain the likely reasons behind it.

Multiple Select

Which of the following are arguments commonly made in favor of trade barriers (protectionism)?

• National defense

• Lower prices for consumers

• Balance of payments

• National pride

Multiple Select

Select all the factors that decrease the demand for a currency.

• Economic recession or uncertainty

• Lower interest rates

• Political stability

• High inflation

Multiple Choice

Which of the following is NOT a main goal of the World Trade Organization (WTO)?

• Reduce trade barriers worldwide

• Ensure trade flows smoothly and predictably

• Settle trade disputes between countries

• Promote military alliances between countries

Multiple Select

Which of the following are key features of the USMCA regional trade agreement?

• Eliminates most tariffs between the three countries

• Updated rules for digital trade and e-commerce

• Stronger labor and environmental protections

• Requires all trade to be conducted in US dollars

Multiple Choice

Which of the following is a reason why trade barriers exist between countries?

• To protect domestic industries

• To encourage free trade

• To increase globalization

• To reduce economic growth

Open Ended

How does globalization impact international trade and the economy of a country?