CH 3: Trade and development

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What drives the exchange of goods and services between countries?

Cultural similarities

Physical proximity

Language barriers

Uneven distribution of resources (correct)

Which term defines the difference between a country's exports and imports?

Economic disparity

Import deficit

Export surplus

Trade balance (correct)

What does a trade surplus for a country indicate?

It has a negative impact on the economy

It is self-sufficient in all resources

It earns more from exports than it spends on imports (correct)

It imports more than it exports

What is South-South Trade in the context of international trade?

Exchange of goods and services between developing countries Signup and view all the answers

Why does commodity dependence pose challenges for many of the world's poorest nations?

It results in low value-added and vulnerability to price fluctuations Signup and view all the answers

What does a trade deficit indicate for a country?

It spends more on imports than it earns from exports Signup and view all the answers

Why do countries engage in international trade?

To import what they lack and export surplus goods or services Signup and view all the answers

What is the primary focus of fair trade compared to free trade?

Ensuring producers in developing countries receive a fair deal Signup and view all the answers

How does globalization impact the world's economies?

By increasing interconnectedness and interdependence Signup and view all the answers

What can be a challenge associated with globalization?

Cultural homogenization Signup and view all the answers

Why may less economically developed countries (LEDCs) be disadvantaged in terms of trade?

They primarily export raw materials and import manufactured goods Signup and view all the answers

What are some trade barriers that governments may impose to protect domestic industries?

Tariffs and quotas Signup and view all the answers

What is a common outcome for countries adopting export-led growth strategies?

Overreliance on unprocessed raw materials Signup and view all the answers

Which practice aims to compare a country's export prices with its import prices?

Terms of Trade Signup and view all the answers

What aspect defines globalization?

Increasing interconnectedness and interdependence of economies Signup and view all the answers

What is the primary focus of free trade?

Advocating for unrestricted exchange of goods and services Signup and view all the answers

Why might export-led growth strategies yield mixed results for different countries?

Diverse economic structures among countries Signup and view all the answers

In international trade, what are governments likely to impose to protect domestic industries?

Quotas and tariffs Signup and view all the answers

What is a common challenge associated with globalization?

Environmental degradation Signup and view all the answers

Which practice aims to ensure that producers in developing countries receive fair compensation?

Fair trade Signup and view all the answers

What is the main drawback for less economically developed countries (LEDCs) in terms of trade?

Reliance on raw material exports and manufactured imports Signup and view all the answers

What is the primary reason why countries engage in international trade?

To import goods and services they lack Signup and view all the answers

How does a trade deficit affect a country's economy?

It means the country spends more on imports than it earns from exports Signup and view all the answers

What is a common disadvantage faced by countries relying heavily on exporting primary products?

Vulnerability to price fluctuations Signup and view all the answers

Which term is used to describe the exchange of goods and services between developing countries?

South-South Trade Signup and view all the answers

What does a trade surplus for a country indicate?

A positive balance of trade with earnings exceeding spending on imports Signup and view all the answers

Why is international trade considered a major component of economic activity for countries?

To influence economic prosperity and development Signup and view all the answers

What is the significance of the balance of trade for a country?

Defines the difference between its exports and imports Signup and view all the answers

What defines the difference between a country's exports and imports in international trade?

Trade deficit Signup and view all the answers

Why does commodity dependence pose challenges for many of the world's poorest nations?

It causes vulnerability to price fluctuations. Signup and view all the answers

In the context of international trade, what is the impact of a country earning more from its exports than it spends on imports?

Trade surplus Signup and view all the answers

What is the primary disadvantage faced by countries heavily reliant on exporting primary products?

Vulnerability to price fluctuations Signup and view all the answers

Which term is used to describe trade between developing countries that has been increasing in recent times?

South-South Trade Signup and view all the answers

What aspect of international trade involves a country exporting goods and services it can produce more efficiently or of better quality?

Comparative advantage Signup and view all the answers

How is the trade balance of a country defined in international trade?

(Exports - Imports) / (Exports + Imports) Signup and view all the answers

Which economic strategy involves countries relying on unprocessed raw materials for export?

Export-Led Development Signup and view all the answers

What do governments primarily use to protect domestic industries in international trade?

Trade Barriers Signup and view all the answers

Which aspect of globalization is a concern due to the potential loss of unique cultural identities?

Cultural Homogenization Signup and view all the answers

What is the primary drawback of terms of trade for less economically developed countries (LEDCs)?

Reliance on Raw Material Exports Signup and view all the answers

In international trade, what is a common goal of fair trade initiatives?

Ensuring Fair Compensation for Producers Signup and view all the answers

Which practice focuses on promoting the unrestricted exchange of goods without barriers?

Free Trade Principle Signup and view all the answers

How do governments attempt to protect domestic industries from foreign competition?

Imposing Trade Barriers Signup and view all the answers

What is a notable challenge associated with the concentration of economic power in transnational corporations due to globalization?

"Race to the Bottom" in Wages Signup and view all the answers

CH 3: Trade and development

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Questions and Answers

What drives the exchange of goods and services between countries?

Which term defines the difference between a country's exports and imports?

What does a trade surplus for a country indicate?

What is South-South Trade in the context of international trade?

Why does commodity dependence pose challenges for many of the world's poorest nations?

What does a trade deficit indicate for a country?

Why do countries engage in international trade?

What is the primary focus of fair trade compared to free trade?

How does globalization impact the world's economies?

What can be a challenge associated with globalization?

Why may less economically developed countries (LEDCs) be disadvantaged in terms of trade?

What are some trade barriers that governments may impose to protect domestic industries?

What is a common outcome for countries adopting export-led growth strategies?

Which practice aims to compare a country's export prices with its import prices?

What aspect defines globalization?

What is the primary focus of free trade?

Why might export-led growth strategies yield mixed results for different countries?

In international trade, what are governments likely to impose to protect domestic industries?

What is a common challenge associated with globalization?

Which practice aims to ensure that producers in developing countries receive fair compensation?

What is the main drawback for less economically developed countries (LEDCs) in terms of trade?

What is the primary reason why countries engage in international trade?

How does a trade deficit affect a country's economy?

What is a common disadvantage faced by countries relying heavily on exporting primary products?

Which term is used to describe the exchange of goods and services between developing countries?

What does a trade surplus for a country indicate?

Why is international trade considered a major component of economic activity for countries?

What is the significance of the balance of trade for a country?

What defines the difference between a country's exports and imports in international trade?

Why does commodity dependence pose challenges for many of the world's poorest nations?

In the context of international trade, what is the impact of a country earning more from its exports than it spends on imports?

What is the primary disadvantage faced by countries heavily reliant on exporting primary products?

Which term is used to describe trade between developing countries that has been increasing in recent times?

What aspect of international trade involves a country exporting goods and services it can produce more efficiently or of better quality?

How is the trade balance of a country defined in international trade?

Which economic strategy involves countries relying on unprocessed raw materials for export?

What do governments primarily use to protect domestic industries in international trade?

Which aspect of globalization is a concern due to the potential loss of unique cultural identities?

What is the primary drawback of terms of trade for less economically developed countries (LEDCs)?

In international trade, what is a common goal of fair trade initiatives?

Which practice focuses on promoting the unrestricted exchange of goods without barriers?

How do governments attempt to protect domestic industries from foreign competition?

What is a notable challenge associated with the concentration of economic power in transnational corporations due to globalization?

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