International Trade Vocabulary Quiz
12 multiple-choice questions on international trade and economics vocabulary: tariffs, quotas, embargoes, comparative advantage, WTO, free trade and balance of payments. B2 level.
This quiz focuses on how the target vocabulary for International Trade is actually used in context at B2 level, rather than testing bare definitions. Correct answers you will need to identify include terms such as tariff, deficit, comparative, embargo and quota, each embedded in a full example sentence so you have to judge meaning from context, not just recognise an isolated word.
Working through all 12 questions and checking the explanations in the FAQ below is a quick way to spot any terms you are still unsure of. Revisiting the quiz again after a day or two, rather than only once, is one of the most reliable ways to move new vocabulary from passive recognition into words you can use confidently yourself in speaking and writing.
Keep building your international trade vocabulary.
International Trade Vocabulary — FAQ
What is a 'tariff' in international trade?
A tariff is a tax imposed by a government on imported goods. It raises the price of foreign goods, making domestic goods more competitive, and generates government revenue. The WTO regulates tariffs and works to reduce them through multilateral negotiations.
What is a 'trade deficit'?
A trade deficit occurs when a country imports more goods and services than it exports. A trade surplus is the opposite. A persistent deficit may signal that a country is consuming more than it produces or that its export industries are not competitive enough.
What is 'comparative advantage'?
Comparative advantage is the principle that a country should specialise in producing goods in which it has a lower opportunity cost relative to other countries. By specialising and trading, all countries can consume more than if they tried to be self-sufficient. It underpins the theoretical case for free trade.
What is an 'embargo'?
An embargo is an official ban on trade with a particular country or on the export of specific goods. It is usually imposed for political or security reasons and is among the most severe trade restrictions.
What is a 'trade quota'?
A trade quota is a government limit on the quantity of a particular good that can be imported during a specific period. Unlike tariffs, quotas set an absolute ceiling on imports rather than raising their price.
What does 'WTO' stand for?
WTO stands for World Trade Organization, established in 1995. It regulates international trade, provides a framework for negotiating trade agreements, and operates a dispute settlement system. The UK is a member in its own right since leaving the EU.
What is 'free trade'?
Free trade is a policy under which governments impose no restrictions such as tariffs, quotas or subsidies on imports and exports. Free trade agreements (FTAs) between countries reduce or eliminate these barriers to boost economic activity.
What is a 'non-tariff barrier'?
A non-tariff barrier (NTB) is any trade restriction other than a tariff, such as import quotas, product standards, licensing requirements or subsidies to domestic industries. NTBs have become more significant as tariff levels have fallen globally.
What is the 'balance of payments'?
The balance of payments summarises all economic transactions between a country and the rest of the world. It has two main accounts: the current account (trade in goods and services, income and transfers) and the capital and financial account (investment flows).
What is 'dumping' in trade policy?
Dumping occurs when a company exports goods to a foreign market at a price below their normal value, undercutting domestic producers. The WTO allows members to impose anti-dumping duties if dumped goods cause material injury to a domestic industry.