Introduction
What is international trade?
The exchange of goods and services among businesses in various countries
What are exports?
Items transported out of a country to a foreign country
What is free trade?
A policy in which there is no government regulation and countries may trade as they please.
What are trade barriers?
Governmental restrictions placed on international trade.
What does WTO stand for?
World Trade Organization
What two types of business organizations are involved in international trade?
Multinational corporations and international business companies
Name one example of a major U.S. export?
Electronic equipment, aircraft and spacecraft, pharmaceuticals, or organic chemicals
What is a tariff?
A tax set on imported goods.
Name two types of trade barriers
Tariffs, embargoes, quotas, standards, subsidies, boycotts, licenses, exchange control, or protectionism (any two)
What is one main functions of the World Trade Organization?
Negotiating trade agreements, settling trade disputes, or enforcing trade rules
Name two benefits international trade offers to participating countries
Boosting the economy, creating efficiency, and improving manufacturing of products (any two)
List two leading trade partners of the United States
China, the European Union, Canada or Mexico (any two)
A treaty between two or more countries that establishes a free trade area and allows uniform tariffs on non-member countries.
What is an embargo, and why is it usually enacted?
An embargo is an absolute ban on imports or exports, usually enacted for political reasons.
What is GATT and what is its main purpose?
The General Agreement on Tariffs and Trade; its purpose is to reduce tariffs and other trade barriers and promote fair trade
What are imports, and name one example of a U.S. import
Imports are items transported into a country from a foreign country; examples include crude oil, computers, automobiles, clothing, or agricultural products.
What is the balance of trade, and how is it calculated?
The balance of trade is calculated by subtracting imports from exports (exports - imports)
What is a free trade zone?
Designated areas where goods can be landed, stored, assembled, and re-exported without customs duties.
What are quotas used to regulate?
Quotas regulate the amount of imports to maintain and manipulate supply, demand and prices
What countries are part of NAFTA?
United States, Canada, and Mexico
Explain one reason why countries use imports
To satisfy shortages, avoid high production costs, obtain unavailable items, or increase quality of items (any two)
What is a trade deficit, and when does it occur?
A trade deficit occurs when a country's imports exceeds its exports, resulting in a negative trade balance.
Name two benefits of free trade zones
Duty-free areas, reduced labor costs, and storage and distribution facilities (any two).
Explain protectionism and one reason countries use it.
Protectionism imposes extra costs on imports to protect local businesses and jobs or offset advantages such as low wages.
Describe two goals of the General Agreement on Tariffs and Trade (GATT)
Expanding the exchange of goods, encouraging free trade, regulating and reducing tariffs, resolving trade disputes, or developing effective demand (any two)