Where does the United States stand as a participant in international trade?

It is a major importer and exporter.

What is the law of comparative advantage?

A country is better off producing goods and services that it can produce efficiently

A country’s greatest advantage is the ability to import goods that it cannot produce.

A country that supplies things for others has a comparative advantage.

A country has a comparative advantage if it produces goods for export.

What is the biggest factor that leads a country to specialize in certain products?

the ability to trade with other nations

the demand for those products within the country

Why are workers in developed nations worried about job losses due to globalization?

Movement of jobs overseas causes unemployment

Globalization will cause GDP to fall.

Global interdependence causes unemployment.

Movement of jobs within the country causes unemployment.

When economists say that a nation’s currency has become stronger, what do they mean?

It has appreciated and can now buy more foreign products.

It has appreciated, and that nation’s products are now less expensive to foreigners.

It has depreciated and can now buy fewer foreign products.

It has depreciated, and that nation’s products are now more expensive to foreigners.

When a nation exports more than it imports, economists say it has

an unfavorable balance of payments.

What is the purpose of NAFTA?

to create a free-trade zone linking the United States, Canada, and Mexico

to reduce trade restrictions within the European Union

to enforce the trade rules agreed upon by the World Trade Organization

to create a free-trade zone linking the United States and Central America

Which of the following is the best argument in favor of free trade?

Countries with the fewest trade barriers have the highest standard of living.

Free trade allows a country to impose sanctions on a trading partner.

Countries with the fewest trade barriers are members of trade organizations.

Free trade protects a country’s infant industries.

Which of the following is an argument in favor of protectionism?

It gives consumers fewer choices.

How are factors such as climate and natural resources related to development?

Poor climate and resources generally complicate development

Good climate and resources always result in full development.

Technology has made these factors unimportant.

Climate is generally a better predictor of development than resources.

The goal of the European Union is to

Create a single regional economy among its member

involves the lowering or elimination of protective tariffs and other trade barriers between two or more nations

founded with the goal of making global trade more free

To create a free trade zone linking the United States, Canada, and Mexico

Why does the infant mortality rate relate to a country’s level of development?

It is an indicator of nutrition and health care

What is one way the International Monetary Fund helps LDCs?

having trouble repaying their debts

What happens if a nation’s population grows faster than its gross domestic product?

A nation’s per capita GDP is its GDP divided by its population

Poor climate and resources generally complicate development

Nation A has a comparative advantage over Nation B in the production of bicycles. What does this mean

Nation A can produce bicycles at a lower opportunity cost than Nation B

Nation B can produce bicycles at a lower opportunity cost than Nation A

Nation A can produce bicycles at a higher opportunity cost than Nation B

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