21 Foreign Trade and Globalization

Question 1

causes

Answer 1

• lacks ability to produce
• surplus
• foreign relations

Question 2

can produce more efficiently than others

Answer 2

absolute advantage

Question 3

proponent of absolute advantage

Answer 3

adam smith

Question 4

no need to produce everything, only what you’re good at

Answer 4

absolute advantage

Question 5

countries have their own abs. advantage; trading makes goods and services more available

Answer 5

specialization

Question 6

best option, given trade-off

Answer 6

comparative advantage

Question 7

proponent of comparative advantage

Answer 7

david ricardo

Question 8

less opportunity cost is GOOD

Answer 8

comparative advantage

Question 9

pros of foreign trade

Answer 9

• broaden supply
• employment gen
• economics of scale
• lower prices
• break domestic monopolies

Question 10

cons of foreign trade

Answer 10

• industries have no change to grow due to competition
• risk of losing jobs
• diversity output may suffer as local producers leave the market
• colonial mentality

Question 11

diff between monetary value of exports and importants

Answer 11

balance of trade

Question 12

I > E

Answer 12

trade deficit

Question 13

I < E

Answer 13

trade surplus

Question 14

imposed restraint on flow of int’l goods and services; for protection and strategy

Answer 14

trade barriers

Question 15

imposed by nature

Answer 15

natural trade barriers

Question 16

distance, land and water forms

Answer 16

natural trade barriers

Question 17

language, religion and tradition, ideologies

Answer 17

cultural trade barriers

Question 18

tariffs, quotas, standards, embargos, exchange controls

Answer 18

policy trade barriers

Question 19

taxes imposed by gov’t on import/export of goods

Answer 19

tariffs

Question 20

impose limit on number or value of a product

Answer 20

quota

Question 21

policy on product standards for quality, safety, and health

Answer 21

standard

Question 22

restriction on commerce with country/goods

Answer 22

embargo

Question 23

gov’t-imposed limitation on purchase and sale of currencie

Answer 23

exchange controls

Question 24

phenomena; integration and interaction among countries

Answer 24

globalization

Question 25

has significant effect on economy, politics, and culture

Answer 25

globalization

Question 26

group of countries trade freely/integrate economics of member countries

Answer 26

trading blocs

Question 27

give priority and lesson tariffs for member countries

Answer 27

trading blocs

Question 28

regulate connections and relations between countries

Answer 28

international organizations

Question 29

fair, reasonable, regulate tariffs

Answer 29

WTO (world trade organization)

Question 30

help the poor and third world countries in times of financial crisis

Answer 30

WB (world bank)

Question 31

encourage trade; oversee economic development

Answer 31

IMF (international monetary fund)

Question 32

policy advice, lending, capital development, monitor and discourage policies, technical assistance

Answer 32

IMF (international monetary fund)

Question 33

relax government restrictions

Answer 33

liberalization

Question 34

encourage competition

Answer 34

deregulation

Question 35

transfer assets/services from public to private ownership/control

Answer 35

privatization

Question 36

financial and social support from government to protect poor and vulnerable from shocks of economic crises

Answer 36

social safety nets

Question 37

political and ideological domination of powerful country

Answer 37

hegemonization

Question 38

different cultures become more similar/uniform in beliefs, values, practices, behaviors

Answer 38

homogenization