International Trade and Economics Quiz

Balance of trade specifically measures the gap between a country's exports and imports of goods, excluding services and capital.

The WTO plays a central role in setting trade rules, promoting negotiations, and resolving disputes among member nations.

Free trade agreements promote, rather than hinder, international trade by reducing restrictions and barriers between participating countries.

International trade typically contributes to economic growth and job creation, reducing unemployment rates rather than increasing them.

Net exports represent the difference between a country's total exports and imports, indicating the overall trade balance.

Exchange rates are influenced by various factors, but domestic savings, in isolation, is not a direct determinant of currency value in the foreign exchange market.

Resource endowment determines a country's efficiency in producing certain goods, influencing its comparative advantage in trade.

Tariffs are imposed to shield domestic industries from foreign competition by making imported goods more expensive.

Dumping involves selling goods in foreign markets at prices below production costs, potentially harming domestic industries in the importing country.

The most-favored-nation principle involves offering a trading partner the lowest tariff rates granted to any other nation, promoting fairness in trade relations.

A trade deficit occurs when a country's imports exceed its exports, leading to a negative balance in the trade of goods and services.

GATT aims to foster global free trade by negotiating and reducing tariffs and other trade barriers among participating countries.

Comparative advantage theory advocates for countries specializing in goods they produce efficiently, fostering mutually beneficial trade.

Currency devaluation involves a deliberate reduction in the value of a country's currency relative to others, making exports more competitive and imports more expensive.