Principles of International Trade and Economic Specialization Quiz

Economic specialization involves concentrating efforts on producing a specific set of goods or services.

A trade surplus occurs when a country's exports surpass its imports in quantity and value.

International trade generally promotes economic growth; decreased growth is not a typical outcome.

The 'invisible hand' concept in economics is associated with the influential economist Adam Smith.

In a free market economy, resources are privately owned, allowing for individual decision-making and market-driven outcomes.

Comparative advantage in international trade occurs when a country can produce a good more efficiently than another with fewer resources.

The Comparative Advantage Theory advocates for countries specializing in producing goods where they have a comparative advantage.

Absolute advantage is demonstrated when a country can produce a good using fewer inputs than another.

The WTO aims to ease trade negotiations and settle disputes, fostering a fair global trading system.

The Smoot-Hawley Tariff Act is famous for imposing elevated tariffs on imported goods.

A tariff refers to a policy where a country restricts imports through taxes, fostering free exports.

An import quota is a non-tariff barrier that restricts the quantity of a specific good that can be imported.

Export-oriented industrialization is a government policy focusing on boosting exports and limiting imports to stimulate economic growth.

Currency manipulation involves a country intentionally devaluing its currency to gain a trade advantage.

An arms embargo is a trade sanction that restricts the trade of arms with a specific country for political or security reasons.