International Economics: Understanding Global Trade and Interdependence
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Questions and Answers

What may enable countries to be more efficient when they specialize?

  • Small-scale production
  • International borrowing
  • Large-scale production (correct)
  • Import tariffs

    • What is a consequence of international trade for the distribution of income within a country?

  • It reduces income inequality
  • It may affect the distribution of income (correct)
  • It increases the income of all citizens
  • It has no impact on income distribution

    • What determines the pattern of trade between countries?

  • Differences in climate and resources
  • Differences in labor productivity
  • Differences in government policies
  • All of the above (correct)

    • What is a consequence of governments restricting trade?

    <p>It reduces the benefits of trade</p> Signup and view all the answers

    What is a benefit of exchanging risky assets such as stocks and bonds between countries?

    <p>It reduces the variability of income</p> Signup and view all the answers

    What measures the balance of funds that central banks use for official international transactions?

    <p>Balance of payments</p> Signup and view all the answers

    What is the primary focus of international economics?

    <p>How nations interact through trade, money flows, and investment</p> Signup and view all the answers

    What has been the trend in the importance of international trade over time?

    <p>It has become three times more important</p> Signup and view all the answers

    Why do countries engage in international trade?

    <p>To export goods made with relatively abundant resources and import goods made with relatively scarce resources</p> Signup and view all the answers

    What happened to imports and exports in 2009 and 2020?

    <p>They experienced significant declines</p> Signup and view all the answers

    How does the United States compare to other countries in terms of international trade?

    <p>It relies less on international trade</p> Signup and view all the answers

    What is the key insight of international economics?

    <p>Countries selling goods and services to each other almost always generate mutual benefits</p> Signup and view all the answers

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