Trade Surplus and Its Implications

<p>Job losses and wage reductions due to import competition. (B)</p> Signup and view all the answers

<p>It introduces new technologies, creates jobs, and enhances skills. (C)</p> Signup and view all the answers

<p>Its strategic location, world-class infrastructure, and productive workforce. (A)</p> Signup and view all the answers

<p>Creating a business-friendly environment with favorable regulations. (C)</p> Signup and view all the answers

<p>Maximizing exports and minimizing imports to accumulate gold and silver. (C)</p> Signup and view all the answers

<p>To replace global market forces with government intervention in determining trade outcomes. (A)</p> Signup and view all the answers

<p>They aim to control the supply and price of specific products in international markets. (D)</p> Signup and view all the answers

<p>To protect domestic industries from foreign competition by limiting imports. (A)</p> Signup and view all the answers

<p>To ensure that a certain percentage of a product's value is sourced from domestic materials or labor. (B)</p> Signup and view all the answers

<p>Preferential duties lower tariffs for specific countries, while domestic content provisions mandate domestic sourcing of materials and labor. (C)</p> Signup and view all the answers

<p>VERs are agreements between exporting countries and importing countries, while import quotas are unilaterally imposed by importing countries. (B)</p> Signup and view all the answers

<p>Domestic content provisions for automobiles. (D)</p> Signup and view all the answers

<p>Preferential duties (B)</p> Signup and view all the answers

<p>To discourage exports and control domestic prices (D)</p> Signup and view all the answers

<p>Most Favored Nation (MFN) Principle (A)</p> Signup and view all the answers

<p>To settle trade disputes and lower trade barriers (C)</p> Signup and view all the answers

<p>To provide lower tariffs for certain countries (A)</p> Signup and view all the answers

<p>They provide government payments to lower export prices (D)</p> Signup and view all the answers

<p>Real-world frictions (A)</p> Signup and view all the answers

<p>Generate revenue for the government (B)</p> Signup and view all the answers

<p>As a percentage of the product's value (A)</p> Signup and view all the answers

<p>They make imported goods more expensive. (B)</p> Signup and view all the answers

<p>Reduction of import duties on certain goods (C)</p> Signup and view all the answers

<p>Restrictions on factor mobility (A)</p> Signup and view all the answers

<p>It assumes full specialization and equal factor prices. (D)</p> Signup and view all the answers

<p>$200 (D)</p> Signup and view all the answers

<p>Free trade leads to equalization of prices of factors of production across countries. (B)</p> Signup and view all the answers

<p>Countries have access to different technologies. (D)</p> Signup and view all the answers

<p>Demand for labor increases, driving wages up. (D)</p> Signup and view all the answers

<p>Leontief Paradox. (D)</p> Signup and view all the answers

<p>Prices of labor and capital converge over time. (B)</p> Signup and view all the answers

<p>The price of labor increases due to higher demand. (A)</p> Signup and view all the answers

<p>Free trade causes wages in different countries to equalize. (C)</p> Signup and view all the answers

<p>Trade results in increased returns to the abundant factor in each country. (C)</p> Signup and view all the answers

<p>It creates a surplus of goods leading to price depression. (C)</p> Signup and view all the answers

<p>Free trade without restrictions benefits all countries. (A)</p> Signup and view all the answers

<p>A country’s ability to produce a specific good more efficiently than another. (B)</p> Signup and view all the answers

<p>A country’s relative efficiency in producing one good over another. (C)</p> Signup and view all the answers

<p>It has a comparative advantage in coffee over corn. (C)</p> Signup and view all the answers

<p>It increases total output by using resources more efficiently. (B)</p> Signup and view all the answers

<p>Countries export goods that use their abundant factors of production intensively. (C)</p> Signup and view all the answers

<p>It often leads to the exploitation of labor for lower costs. (D)</p> Signup and view all the answers

A theory suggesting that free trade equalizes factor prices (like wages) across countries over time.

A foundational theory in international trade explaining how countries export goods based on their factor endowments.

An observation contradicting H–O theory, where the U.S. exported more labor-intensive goods despite being capital-rich.

The process by which trade causes changes in factor prices, leading to wage and capital price convergence.

Countries effectively 'trade' factors of production embedded in goods, leading to price convergence.

Assumes free trade, same technology, and immobile factors internationally but mobile domestically.

A country that produces and exports labor-intensive goods due to an abundance of labor.

A country that produces and exports capital-intensive goods due to an abundance of capital.

A tax based on a percentage of the import's value.

Lower tariffs for specific countries, encouraging trade.

Government payments to reduce export prices and promote sales abroad.

An international body that sets trade rules and settles disputes.

Government strategies replace market forces to control trade outcomes.

Barriers like transportation costs and tariffs that prevent full equalization of factor prices.

Variations in production technologies that hinder complete factor price equalization between countries.

A situation where countries do not fully specialize in production, affecting predictions of the FPE theory.

Restrictions on the movement of labor within or between countries due to domestic issues or culture.

Reduction or elimination of tariffs on certain goods as part of trade agreements, making imports cheaper.

A tax imposed on imports based on their value, calculated as a percentage.

The purpose of tariffs providing income for the government while regulating trade.

Using tariffs to make imported goods more expensive, encouraging local purchases.

Greater choice, lower prices, and higher living standards for consumers.

Enhances quality of life and living standards through trade.

Inflow of capital, technology, and skills from abroad to boost local economies.

Creates jobs, introduces new tech, and enhances skills of workers.

Strategic location and world-class infrastructure attract foreign investments.

Policies aimed at maximizing exports and minimizing imports to hoard wealth.

Trade can create national interdependence, promoting inclusivity and peace.

Trade and FDI can displace jobs, forcing wage adjustments for some workers.

Surplus of goods leads to lower market prices.

Countries may lower prices to compete, harming wages.

Mercantilism promotes low labor costs, harming workers' welfare.

Ability to produce a good more efficiently than another country.

Producing goods in which a country has a relative efficiency advantage.

Countries focus on producing what they do best for efficiency.

Countries export goods that use their abundant production factors.

Trade without restrictions can benefit all countries involved.

Groups that restrict supply or control prices of products internationally.

Reasons used by policymakers to protect industries for strategic goals.

Rules requiring products to have a % of domestic materials.

Regulations other than tariffs that restrict import/export activities.

Exporting country limits quantity exported to another country.

Limits placed on the quantity of a product that can be imported.