Exporting and Importing quiz #1 Flashcards
Exporting and Importing quiz #1
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What is a positive balance of trade for a country? A positive balance of trade occurs when a country's exports exceed its imports, resulting in a trade surplus. What are two benefits to suppliers of exporting? Suppliers benefit from exporting by accessing larger markets and increasing their sales and profits. What is a benefit for U.S. businesses that choose to export? U.S. businesses that export can increase their producer surplus and overall profits by selling goods at higher world prices. When does a trade deficit occur? A trade deficit occurs when a country's imports exceed its exports. Which of the following would decrease the United States' net exports to South Korea? An increase in U.S. imports from South Korea would decrease the United States' net exports to South Korea. Which of the following is not a huge barrier to exporting for small and medium-sized firms? Having access to the internet is not a huge barrier to exporting for small and medium-sized firms. Why do companies decide to enter a foreign market? Companies enter foreign markets to access new customers, increase sales, and take advantage of comparative advantage. Which scenario best demonstrates foreign direct investment? A U.S. company builds and operates a factory in another country, such as Mexico. Which of the following is a risk associated with importing goods? Importing goods can expose businesses to supply chain disruptions and changes in foreign regulations. What was one result of the COVID-19 pandemic on international business? The COVID-19 pandemic disrupted global supply chains and international trade flows. Which of the following is true about the trade imbalance in the United States? The United States often runs a trade deficit, importing more than it exports. Which of the following will increase the United States trade deficit? An increase in imports without a corresponding increase in exports will increase the U.S. trade deficit. What happens when purchasing foreign goods? Purchasing foreign goods increases a country's imports. What type of tax is levied by a nation on goods imported into the country? A tariff is a tax levied on imported goods. What type of trade barrier completely prohibits imports once a certain limit has been reached? A quota is a trade barrier that prohibits imports after a certain limit is reached. Which of the following is an advantage of direct exports? Direct exports allow businesses to reach new markets and increase sales without establishing foreign operations. What term describes a ban or restriction on trade with another country? An embargo is a ban or restriction on trade with another country. How can a nation benefit from effectively exporting its goods? A nation benefits from exporting by increasing producer surplus and overall national welfare. What is the difference between global trade and domestic trade? Global trade involves exchanging goods and services between countries, while domestic trade occurs within a single country. What is importing? Importing is the act of purchasing goods produced in other countries and bringing them into one's own country. How do exports and imports help the economy of a country? Exports and imports increase national welfare by allowing countries to specialize and benefit from comparative advantage. What is exporting? Exporting is selling domestically produced goods to buyers in other countries. What economic theory would be most likely to make a person oppose taxing imports? The theory of comparative advantage opposes taxing imports, as it supports free trade for mutual benefit. How do bananas represent the effects of international trade? Bananas, often imported from countries with suitable climates, show how trade allows consumers access to goods not produced domestically. What is the exchange ratio at which two countries trade their products? The exchange ratio is called the terms of trade. How would a nation most likely try to limit inexpensive cars from being imported? A nation could impose tariffs or quotas to limit the import of inexpensive cars. Climate and natural resources are two predictors of trade patterns. Which country exports coffee? Countries like Brazil, with suitable climate and resources, export coffee. Which are examples of devices countries use to exert trade protectionism? Countries use tariffs, quotas, and embargoes to exert trade protectionism. Which of the following is not a type of trade barrier? A free trade agreement is not a trade barrier. What kinds of goods are typically exported by developed countries? Developed countries typically export high-value goods such as machinery, technology, and pharmaceuticals. What occurs when one country refuses to buy goods from another country? This is called an embargo. Which is an example of how trade barriers can affect you as an American consumer? Trade barriers can increase the price of imported goods, making them more expensive for consumers. What is an example of a country that makes use of another nation’s currency? Ecuador uses the U.S. dollar as its official currency. Which is an advantage of international trade agreements? International trade agreements reduce barriers and promote increased trade between member countries. What is the biggest attraction for businesses considering engaging in international business? The biggest attraction is access to larger markets and increased sales opportunities. What is the term for efforts to punish another nation by imposing trade barriers? Such efforts are called economic sanctions. What is true of price quotations for international sale? Price quotations for international sales are typically based on the world price. What are imports and exports? What powers are denied the states in these matters? Imports are goods brought into a country; exports are goods sold abroad. U.S. states cannot regulate international trade; this power is reserved for the federal government. According to economists, international trade among countries _____ . According to economists, international trade among countries increases overall national welfare. Is exporting one of the easiest ways to go international? Yes, exporting is often considered one of the easiest ways for businesses to enter international markets.