Trade Barriers: Tariffs, Quotas, and Embargos Reading Questions (Pg. 150)

Trade Barriers: Tariffs, Quotas, and Embargos Reading Questions (Pg. 150)

Trade Barriers: Tariffs, Quotas, and Embargos Reading Questions (pg. 150)

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  1. What is trade?

The voluntary exchange of goods and services among people and countries

  1. When does trade occur?

It occurs when buyers and sellers freely and willingly engage in market transactions

  1. What is voluntary trade?

When both parties benefit and are better off after the trade than they were before the trade

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  1. What are trade barriers?

A limit on trade between countries. There are several types of trade barriers.

  1. What is a tariff?

A tax on imports

  1. What is a quota?

A limit placed on the number of imports that may enter a country

  1. What is an embargo?

A government order stopping trade with another country

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  1. What is a free-trade zone?

A zone where there are no tariffs

  1. What type of trade barrier is used in Russia?

Tariffs

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  1. Why is steelmaking in Russia a problem for the EU?

The price of steel may go down

International Trade and the Exchanging of Currencies (pg. 151)

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  1. What is currency?

The money people use to make trade easier

  1. True/False: Can you buy items in another country with money from your own country?

False

  1. What do you do with the money from your country when you visit another country?

You exchange it

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  1. Why does the store owner have to exchange his Russian currency to buy olives from an olive farm in Greece?

Because the store owner is in Greece and only accepts Euros and the Russia currency is the rubles.

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  1. Why does having the Euro make trade easier for most European countries?

Trade is easier since they don’t have to exchange currencies

Human Capital and the Gross Domestic Product (pg. 152)

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  1. What is GDP (Gross Domestic Product)?

The total value of all the goods and services produced in a country in one year.

  1. What happens to standard of living when GDP goes up?

Standard of living goes up

  1. How can GDP go up?

Investing in human capital

  1. What is human capital?

The education, training, skills and health of workers in a business or a country

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  1. What is the literacy rate of the UK, Germany and Russia?

Over 99%

Capital Investments and Gross Domestic Product (pg. 153)

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  1. What else must countries invest in to raise GDP?

Physical goods/capital

  1. What is physical capital?

The factories, machines, technologies, buildings and property needed by businesses to operate

  1. What can physical capital help a country do?

Help a business/country produce more goods at a lower price

The Role of Natural Resources in a Country’s Economy (pg. 154)

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  1. What are natural resources?

“gifts from nature”; things that come from nature naturally; not manmade

  1. What are the TWO examples of natural resources given in the paragraph?

Fertile soil, water, and forests

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  1. What do countries have to do if they do not have the natural resources in their own country?

They must import the items that they need; this adds to the cost of goods and services

  1. What can a country do if it has a lot of natural resources?

It can trade them to other countries for goods and services needed

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  1. What do you think a “nonrenewable” resource is?

A resource that can only be used once

  1. What is an example of a nonrenewable resource?

Gas, oil, fossil fuels

  1. What do you think a “renewable” resource is?

A resource that can be used multiple times

  1. What is an example of a renewable resource?

Water, trees, air, sun

The Role of Entrepreneurship (pg. 155)

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  1. What is an entrepreneur?

A person who provides the money to start and own a business.

  1. What three resources do entrepreneurs bring together to start their business?

Capital, human and natural

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  1. What are three things that Russia needs to do in order to make it easier to open a business?

Protecting private property
Protecting businesses
They need to make it easier to open a business

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  1. What are two good things that come from entrepreneurs opening a business in a country?

Hire workers which gives people jobs
Encourage trade within a country
tax money helps the government

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