Economics · Unit 14

International Trade

Imports, exports, trade, and exchange rates

Comparative advantage is the least intuitive important idea in economics: two countries benefit from trading even when one is better at producing everything.

The unit covers imports and exports, comparative advantage, tariffs and trade barriers, exchange rates, and globalisation.

This unit breaks down into 23 short steps and 120 questions, starting at difficulty 1 and building to 5. Below you can see exactly what it covers, how the path is structured, and worked examples with explanations.

Steps: 23
Questions: 120
Difficulty: 1-5

What this unit covers

Comparative Advantage
Imports and Exports
Exchange Rates
Globalization
Tariffs and Trade Barriers

Where this fits

Needs Microeconomics. Connects to Geography's Development and the Economy.

Where people slip

Comparative advantage is about relative efficiency, not absolute. The gains come from each side giving up less to produce what it makes, regardless of who is faster.

How the unit is structured

International Trade runs as 23 short steps that unlock in order. 17 are practice rounds and 6 are challenge rounds that pull together everything before them. Questions start at difficulty 1 and climb to 5 as you progress.

Step 1 · easierStep 23 · harder

Challenge rounds

Example questions

30 real questions from this unit, with the answer and the reason behind it, grouped by what they practise. There are 120 in the unit altogether.

Comparative Advantage

Fill the blankLevel 2
1. A country has a comparative advantage in a good when it can make it at a lower ____ cost than others.
- opportunitycorrect
- extra
- shipping
- tax
Comparative advantage means making something at a lower opportunity cost than others.
Multiple choiceLevel 2
2. Why do countries usually specialize and trade instead of making everything themselves?
- They can make more in total by focusing on what they do bestcorrect
- It is against the law to make everything
- Trading always loses money
- So they never have to work again
Specializing lets countries produce more in total and then trade, so everyone can have more.
Odd one outLevel 2
3. Three of these describe how trade helps countries. Which one does NOT belong?
- Countries can specialize
- People get more variety of goods
- Goods can be cheaper
- Everyone must make everything alonecorrect
Trade lets countries specialize instead of each making everything alone, so that one is the odd item.
Put in orderLevel 2
4. Put these steps of specializing and trading in the right order.
Answer: Each country finds what it makes best -> Each country focuses on that good -> Countries trade with each other -> Everyone ends up with more goods
First find your strength, focus on it, trade, and then everyone gains.
Choose all that applyLevel 3
5. Which of these are usual gains from countries specializing and trading? Pick all that apply.
- More total output is producedcorrect
- A wider variety of goods to buycorrect
- Lower prices for some goodscorrect
- A promise that no worker ever changes jobs
Specializing and trading raises total output, variety, and often lowers prices, but it does not freeze every job.
Match the pairsLevel 3
6. Match each trade idea to its meaning.
Answer: Absolute advantage = Making more with the same resources; Comparative advantage = Producing at a lower opportunity cost; Specialization = Focusing on one main good; Gains from trade = Both sides ending up better off
Each trade idea has its own clear meaning in the theory of trade.

Exchange Rates

Multiple choiceLevel 1
7. An exchange rate tells you the price of one country's money measured in what?
- Another country's moneycorrect
- Grams of gold only
- Hours of work
- Liters of oil
An exchange rate is the price of one currency in terms of another currency.
Choose all that applyLevel 2
8. For which of these might you need to know an exchange rate? Pick all that apply.
- Traveling to another countrycorrect
- Buying something priced in a foreign currencycorrect
- Watching a movie at home
- Sending money to family abroadcorrect
You need an exchange rate whenever money crosses between two currencies.
Fill the blankLevel 2
9. The price of one currency in terms of another is called the ____ ____.
- exchange ratecorrect
- interest rate
- sales tax
- trade quota
The exchange rate is the price of one currency in another.
Match the pairsLevel 2
10. Match each country to the currency it uses.
Answer: Japan = Yen; United States = Dollar; United Kingdom = Pound; India = Rupee
Each country has its own currency that trades at an exchange rate with others.
Sort into groupsLevel 3
11. Sort each result by whether it comes from your currency getting stronger or weaker.
Answer: Imported goods become cheaper for locals = Stronger currency; Your exports look cheaper to foreign buyers = Weaker currency; Traveling abroad gets cheaper for locals = Stronger currency; Foreign tourists find your country cheaper = Weaker currency
A stronger currency makes imports and foreign trips cheaper, while a weaker one makes exports and visits cheaper for foreigners.
Put in orderLevel 5
12. The J-curve describes the trade balance after a currency depreciates. Put these effects in time order.
Answer: Import prices rise almost immediately -> The trade balance briefly worsens -> Buyers slowly shift toward cheaper exports -> The trade balance improves over time
The J-curve shows the trade balance dipping first, then recovering as trade volumes adjust.

Globalization

Multiple choiceLevel 1
13. Countries and people around the world becoming more connected through trade, travel, and technology is called ____.
- globalizationcorrect
- barter
- inflation
- recession
Globalization is the growing connection between countries through trade and technology.
Choose all that applyLevel 2
14. Which of these help make globalization possible? Pick all that apply.
- Faster shipping and airplanescorrect
- The internet and phonescorrect
- Trade between countriescorrect
- Never leaving your own town
Transport, communication, and trade all connect the world more closely.
Fill the blankLevel 2
15. When companies sell their products in many countries around the world, this is part of ____.
- globalizationcorrect
- farming
- saving
- bartering
Selling and connecting across many countries is part of globalization.
Match the pairsLevel 2
16. Match each thing to how it helps connect the world.
Answer: Airplanes = Move people quickly; Internet = Share ideas fast; Cargo ships = Carry goods far; Trade = Exchange goods between countries
Transport, communication, and trade all bring the world closer together.
Odd one outLevel 2
17. Three of these are signs of globalization. Which one is NOT?
- Goods shipped between countries
- Ideas shared online worldwide
- People traveling across borders
- A country cut off from all otherscorrect
A country cut off from everyone is the opposite of globalization.
Put in orderLevel 3
18. Put these steps of a global supply chain in order, from start to finish.
Answer: Raw materials are gathered -> Parts are made in factories -> The product is assembled -> The finished product is shipped to stores
A global supply chain moves from raw materials to parts to assembly to delivery.

Imports and Exports

Fill the blankLevel 1
19. Goods sent out of a country to be sold abroad are called ____.
- exportscorrect
- imports
- tariffs
- coins
Exports go out of the country to be sold to others.
Multiple choiceLevel 1
20. Goods that a country buys from other countries and brings in are called what?
- Importscorrect
- Exports
- Wages
- Savings
Imports are things a country buys from abroad and brings into the country.
True or falseLevel 1
21. An import is something a country brings in after buying it from abroad.
Answer: True
Yes, imports are bought from other countries and brought in.
Choose all that applyLevel 2
22. Which of these are examples of a country importing goods? Pick all that apply.
- Buying bananas grown in another countrycorrect
- Bringing in cars made overseascorrect
- Selling wheat to a foreign buyer
- Receiving phones made abroad to sell in local shopscorrect
Importing means buying goods from abroad and bringing them in, so selling wheat out is not an import.
Guess the numberLevel 2
23. A country sells 9 crates of apples to buyers abroad. How many crates did it export?
Answer: 9 crates
Selling goods to buyers abroad means exporting them, so it exported 9 crates.
Odd one outLevel 2
24. Three of these are imports for a country. Which one is NOT?
- Buying oil from another country
- Bringing in foreign-made cars
- Selling homemade furniture to buyers abroadcorrect
- Purchasing coffee grown overseas
Selling furniture abroad is an export, while the other three are goods bought from abroad.

Tariffs and Trade Barriers

Multiple choiceLevel 1
25. A tax that a government puts on goods coming in from other countries is called a ____.
- tariffcorrect
- refund
- wage
- coupon
A tariff is a tax on imported goods.
Choose all that applyLevel 2
26. Which of these are examples of trade barriers? Pick all that apply.
- A tax on imported carscorrect
- A limit on how much sugar can be importedcorrect
- A gift shop holding a sale
- A total ban on trading with a countrycorrect
Tariffs, quotas, and embargoes are all ways to limit or block imports.
Fill the blankLevel 2
27. Trade with few or no barriers between countries is known as ____ trade.
- freecorrect
- blocked
- secret
- barter
Free trade means goods move between countries with little or no barriers.
Odd one outLevel 2
28. Three of these are ways to restrict trade. Which one is NOT?
- Tariff
- Quota
- Embargo
- Exchange ratecorrect
An exchange rate is the price of a currency, not a barrier to trade.
Sort into groupsLevel 2
29. Sort each item as a Tariff or a Quota.
Answer: A tax added to imported shoes = Tariff; Only 1000 cars may be imported this year = Quota; A fee charged on imported steel = Tariff; A cap on tons of imported rice = Quota
Tariffs are taxes on imports; quotas are limits on the amount imported.
Match the pairsLevel 3
30. Match each trade barrier to its description.
Answer: Tariff = A tax on imports; Quota = A limit on the quantity imported; Subsidy = A payment to domestic producers; Embargo = A total ban on trade
Each trade tool works differently to tax, limit, support, or block trade.

Where these questions come from. Each unit starts as a plan of the concepts it should cover and the difficulty it should span. Questions are written against that plan with AI assistance, then checked by a validator that rejects anything without a single defensible answer, an explanation, or plausible wrong options. How we write questions sets out the whole process, and corrections are fixed in the bank and reach the site and the app the same day.

How you practise

This unit mixes 10 different question formats, so you are recalling and applying rather than recognising the same layout every time.

Choose all that apply
Fill the blank
Guess the number
Match the pairs
Multiple choice
Odd one out
Put in order
Sort into groups
True or false
Type the answer

Practise International Trade

120 questions across 23 steps. Start with step one and crawl at your own pace.

Play this unit

Read about International Trade

Explainers from our blog on what this unit covers. Each one ends with real questions from the bank.

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