Global Trade

Question 1

free trade

Answer 1

countries can import and export between each other without any tariff or other barriers.

Question 2

goods

Answer 2

items that are tangible, such as clothes, cars, plants, and fruit

Question 3

protectionism

Answer 3

efforts by governments to shield local producers from competition from imports by imposing tariffs and quotas on imports

Question 4

quotas

Answer 4

limits placed on the amount of a product that can be imported

Question 5

services

Answer 5

intangible activities provided by other people, such as teacher, doctor, hairdresser and mechanic or tourism operator

Question 6

subsidies

Answer 6

government cash payments to prop up domestic industries

Question 7

tariff

Answer 7

Taxes on imported goods meant to ‘protect’ locally produced goods against competition from overseas

Question 8

trade deficit

Answer 8

when the value of a country’s exports is less than the value of its imports

Question 9

trade surplus

Answer 9

when the value of a country’s exports is more than the value of its imports

Question 10

trade war

Answer 10

a form of economic coercion where countries try to attack each other’s international commerce with tariffs, quotas and other measures.

One country will impose a restriction on the other’s exports, causing the other to respond, in a tit-for-tat escalation. This can hurt other nations’ economies and lead to rising political tensions between them.