Question 34

Embargoes

1. are import quotas set to 0.
2. are export quotas set to 0.
3. may be imposed for political reasons.
4. may be imposed for economic reasons.
5. all of the above.

Question 33

The European Union is an example of a(n)

1. free trade area.
2. international trade consortium.
3. customs union.
4. trade pact area.
5. cartel of nations.

Question 32

Outsourcing is the practice of

1. obtaining raw materials from suppliers in other countries.
2. manufacturing product in another country by opening a factory in that nation.
3. purchasing customer services from suppliers in another country where the costs of these services are lower than domestic suppliers.
4. selling goods to another country.
5. answers b and c are both examples of outsourcing.

Question 31

Which of the following statements about NAFTA is FALSE?

1. NAFTA is a free trade zone and not a customs union
2. Canada, Mexico, and the U.S. are the only three members of NAFTA
3. It is difficult to empirically measure the economic effects of NAFTA on the U.S. economy
4. In the long run, NAFTA will increase the number of low-paid jobs in the U.S
5. NAFTA is based on the belief that nations, in the aggregate, gain economically from free international trade

Question 30

Why is international trade important? International trade

1. increases the variety and availability of consumer goods in an economy.
2. expands the production possibilities of a nation's economy.
3. increases an economy's GDP.
4. allows nations to specialize in the production of goods according to comparative advantage.
5. does all of the above.