EPF Vocabulary Unit 3

What is fair trade?

• a) Trade that is conducted without any restrictions

• b) Trade that is conducted based on the principles of equality and fairness

• c) Trade that is conducted without considering environmental impact

• d) Trade that is conducted based on barter system

What is absolute advantage?

• a) The ability of a country to produce a good more efficiently than another country

• b) The ability of a country to produce all goods efficiently

• c) The ability of a country to produce goods without any external assistance

• d) The ability of a country to produce goods without any cost

What is a deficit?

• a) A situation in which a country imports more than it exports

• b) A situation in which a country exports more than it imports

• c) A situation in which supply exceeds demand

• d) A situation in which demand exceeds supply

What is a subsidy?

• a) Financial assistance given by a government to a person or group to support a particular cause

• b) A tax imposed on imported goods

• c) A restriction on trade

• d) A form of trade agreement

What is a surplus?

• a) A situation in which a country exports more than it imports

• b) A situation in which a country imports more than it exports

• c) A situation in which supply exceeds demand

• d) A situation in which demand exceeds supply

What is an exchange rate?

• a) The rate at which goods are exchanged between countries

• b) The rate at which currencies of different countries are traded

• c) The rate at which imports and exports are balanced

• d) The rate at which prices change in an economy

What is comparative advantage?

• a) The ability of a country to produce a good at a lower opportunity cost than another country

• b) The ability of a country to produce all goods at the same cost

• c) The ability of a country to produce goods at a fixed price

• d) The ability of a country to produce goods without considering opportunity cost

What is free trade?

• a) Trade that is conducted without any restrictions

• b) Trade that is conducted with high tariffs

• c) Trade that is conducted without considering economic efficiency

• d) Trade that is conducted without any government intervention