Eng Tech Quiz - Basic Trades

What is **comparative advantage**?

• The ability of a country to produce any good.

• When a country produces goods more efficiently than others.

• A free trade agreement between two countries.

• A tax on imports.

What happens when a country has a **trade deficit**?

• Sells more goods than it buys from other countries.

• Buys more goods than it sells to other countries.

• Imposes tariffs on foreign goods.

• Restricts foreign investment.

Free trade agreements aim to:

• Increase tariffs on foreign goods.

• Eliminate trade barriers between countries.

• Protect local industries from competition.

• Increase the cost of imported goods.

Incoterms define:

• The responsibilities of buyers and sellers in international transactions.

• The exchange rate between two countries.

• The amount of tariffs imposed on imported goods.

• The trade balance between two nations.

A **trade surplus** occurs when:

• A country imports more than it exports.

• A country exports more than it imports.

• A country raises tariffs on foreign goods.

• A country invests abroad.

Tariffs are:

• Taxes on exported goods.

• A type of trade agreement.

• Taxes on imported goods.

• A form of foreign investment.

The **global supply chain** refers to:

• The production of goods within a single country.

• The global network of production and distribution of goods.

• The movement of goods through local markets.

• The regulation of domestic production.

Exchange **rates** affect:

• The price of locally produced goods.

• The cost of goods traded between countries.

• The number of tariffs a country imposes.

• The quantity of goods a country can produce.

Foreign Direct Investment (FDI) occurs when:

• A country increases its trade surplus.

• A company invests in business interests in another country.

• A government imposes trade barriers.

• A country focuses on domestic production.

Commercial **protectionism** is the practice of:

• Encouraging free trade between nations.

• Protecting local industries by limiting imports.

• Increasing foreign investment.

• Reducing tariffs and quotas.