Comprehension

1. Are the following statements true or false?

1. The World Trade Organization (WTO) doesn’t try to encourage free trade and reduce protectionism.

2. Governments often want to protect various areas of the economy.

3. Exports are goods or services bought from a foreign country.

4. Countries can have a comparative advantage - so that they are the cheapest in the world.

5. Various international agreements forbid dumping.

6. A country that exports more goods than it imports has a negative balance of trade.

7. Adding invisibles to the balance of trade gives a country's balance of payments.

8. Trade in goods is sometimes called invisible trade.

Vocabulary

2. Match the words with the definitions below.

1) import	a) the amount by which money spent or owed is greater than money earned in a particular period of time
2) tariff	b) the selling and transporting of goods to another country
3) surplus	c) the act of bringing a product or service into one country from another
4) export	d) a tax that is paid on goods coming into or going out of a country
5) deficit	e) the limited number or amount of people or things that is officially allowed
6) quota	f) the practice of protecting a country’s own industry by taxing foreign goods
7) productivity	g) the amount by which the amount of money received is greater than the amount of money spent
8) protectionism	h) the rate at which a worker, a company or a country produces goods, and the amount produced, compared with how much time, work and money is needed to produce them

3. Fill in the correct words from the list below.

Balance of trade, imports, exports, favourable, imports, invisible, invisible exports, invisible imports, payments, unfavourable, visible.

Exports and Imports

The goods and services sold to other countries are known as … . An export is represented by a flow of money coming into the country. Goods and services bought from other countries are known as … . An import represents flow of money leaving the country. All exports which can be seen, touched or weighed such as oil, machinery etc. are termed as … exports. All imports which can be seen, touched or weighted are known as visible … . … measures the difference between value of visible exports and visible imports. If the visible imports is more than the visible exports then there is … balance of trade. A … balance of trade is when the visible exports is more than the visible imports. … trade involves the exchange of services such as insurance, banking and tourism which cannot be seen or touched. Paying for a foreign holiday is an example of … whereas if a person invests in a foreign country and earns income from there is an example of … . The balance of … shows all the payments and receipts between one country and all the other countries it trades.