Unit 4: Interdependence & Globalization

A U.S. auto manufacturer plans to relocate plant operations to Mexico as a result of the USMCA. Which criticism of free trade agreements would be based on this relocation?

• The demand for U.S. automobiles will decrease.

• The cost for producing U.S. automobiles will increase.

• U.S. automotive designers will have to create more efficient cars.

• U.S. automotive factory workers will have to compete with foreign workers.

The furniture in your home is from France, the tea you drink is from Britain, and the clothes you wear are made in Italy. Last year, your lumber company sold and shipped many materials to Portugal. Which of the following is true about the economy in which you live?

• It relies on the buying and selling of one product.

• It relies solely on agriculture.

• It relies heavily on trade and commerce.

• It relies on government control.

The U.S.-Chile Free Trade Agreement went into effect in 2004. How did the treaty cause the changes shown on this graph?

• by increasing unemployment in Chile

• by eliminating tariffs between the countries

• by preserving natural resources in the United States

• by reducing in the exchange of goods between the countries

A tariff is a tax placed on goods that a country imports and/or exports. A historical example of a tariff used in the United States is the British tariff on goods, such as tea, sent to the colonies. These tariffs made goods more expensive, resulting in colonists purchasing fewer. Based on the text, how do tariffs affect international trade?

• Tariffs increase prices for consumers purchasing imported goods, resulting in lower sales of goods.

• Tariffs decrease prices on imported goods, resulting in consumers purchasing goods in greater quantities.

• Tariffs decrease prices of exported goods for international consumers, resulting in higher sales for merchants.

• Tariffs increase prices of exported goods for international consumers, resulting in a higher production of goods.

What is the primary goal of trade specialization and interdependence?

• to increase the variety of goods each country produces, while making prices high for consumers

• to maximize each country’s productivity strengths, while lowering prices on what they import

• to encourage countries to produce only what they need, while increasing prices on exports

• to reduce each country’s productivity, while minimizing prices for consumers

Which protectionism argument argues that new domestic industries need protective tariffs to establish themselves?

• Military Self-Sufficiency Argument

• Infant Industry Argument

• Increased Domestic Employment Argument

• Cheap Foreign Labor Argument

Which protectionism argument states protective tariffs save U.S. jobs, especially during a recession (2007-2009)?

• Military Self-Sufficiency Argument

• Infant Industry Argument

• Increased Domestic Employment Argument

• Cheap Foreign Labor Argument

Which protectionism argument states that protective tariffs are needed to preserve or strengthen industries that produce materials necessary for national defense?

• Military Self-Sufficiency Argument

• Infant Industry Argument

• Increased Domestic Employment Argument

• Cheap Foreign Labor Argument

Which term means: a stance that some countries adopt to protect their domestic industries from foreign competition?

• Protectionism

• Free trade

• Barriers to trade

• USMCA

Which of the following is NOT an effect of tariffs?

• Decline in consumption

• Increased domestic production

• Decline in imports

• Increased foreign production

• Tariff revenue