International Economics Exam

Front

Trade between nations can be mutually beneficial if one country has a comparative advantage.

Back

a comparative advantage

Front

Countries around the world specialize in production, and trade with other countries, based upon

Back

the comparative advantage in production

Front

If a nation’s balance of trade is in a deficit, that country is

Back

spending more money on imports than it is receiving for exports

Front

A country has a trade deficit when

Back

its import values exceed export values

Front

The difference between a nation’s imports and exports is called

Back

balance of trade

Front

A country has a comparative advantage if it has the ability to produce a product relatively more efficiently or at a lower

Back

opportunity cost

Front

When a country can produce more of a product than any other country, the country is said to have

Back

an absolute advantage

Front

Coming into effect in 1994, NAFTA encouraged free trade between the United States and which two other countries?

Back

Canada and Mexico

Front

Which statement BEST reflects the difference between tariffs and quotas? A) Tariffs raise prices on exports, while quotas set limits on imports B) Tariffs set limits on imports, while quotas raise prices on exports C) Tariffs and quotas both raise prices on exports D) Tariffs and quotas both set limits on imports

Back

Tariffs raise prices on exports, while quotas set limits on imports.

Front

What was the primary subject of the 1990s treaty between the U.S., Canada, and Mexico?

Back

free trade between the three countries