Trade basics
What is the economic term for when a country can produce a good at a lower opportunity cost than others?
Comparative advantage
What is a tax on imported goods called?
Tariff
What global organization sets rules for international trade and resolves disputes?
World Trade Organization (WTO)
What do we call the price of one country’s currency in terms of another?
Exchange rate
If China sells electronics to Europe, what is China doing?
Exporting
What is the total value of goods and services a country sells to other countries called?
Exports
A limit on the amount of a product that can be imported is known as what?
Quota
NAFTA was replaced by which new trade agreement in 2020?
USMCA
When a currency becomes weaker relative to others, what is this process called?
Depreciation
Why might a developing country impose tariffs on foreign agricultural goods?
To protect domestic farmers
The difference between a country’s exports and imports is known as what?
Trade balance
A government payment to domestic producers to help them compete internationally is called what?
Subsidy
What is the name of the EU’s free-trade zone without tariffs between member states?
Single Market
What international institution provides loans to stabilize currencies and economies?
International Monetary Fund (IMF)
If the U.S. bans imports of unsafe toys, what type of trade barrier is used?
Non-tariff barrier / Safety regulation
Which economic model explains how countries benefit from specializing in what they produce best?
The Ricardian model (David Ricardo)
What term describes laws or rules that restrict imports for safety or health reasons?
Non-tariff barriers (NTBs)
Which Asian trade agreement is the world’s largest free trade area by population?
RCEP (Regional Comprehensive Economic Partnership)
A strong domestic currency makes exports more expensive or cheaper abroad?
More expensive
A country joins a free trade agreement but loses some small industries. What economic concept explains this?
Creative destruction
What term describes the situation when a country buys more from abroad than it sells?
Trade deficit
What policy describes countries raising trade barriers against each other repeatedly?
Trade war
What term describes agreements that reduce trade barriers between two specific countries?
Bilateral trade agreements
What is the term for moving production to countries with lower costs?
Offshoring
A country stops trading entirely and produces everything itself. What is this policy called?
Autarky