ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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“For example, in some countries, people grow a lot of rice. They produce more than they need for themselves.”
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“Maybe you mowed your neighbors lawn and she paid you. That was trading a service for money.”
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“Trade involves services, money, and goods.”
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None of the above
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Detailed explanation-1: -Support your answer with evidence from the article. Students should recognize that goods are physical items while services are actions people do. That is why exchanging a scooter for a video game is an example of trading goods while getting paid to mow a neighbor’s lawn is an example of trading a service for money.
Detailed explanation-2: -Henry has food but needs wool whereas Liam has wool but needs food. So Liam and Henry will exchange food and wool with each other so that Liam gets food and Henry gets wool making both of them satisfied. This is a perfect example of trade.
Detailed explanation-3: -Trade refers to the voluntary exchange of goods or services between economic actors. Since transactions are consensual, trade is generally considered to benefit both parties. In finance, trading refers to purchasing and selling securities or other assets.
Detailed explanation-4: -Trade is critical to America’s prosperity-fueling economic growth, supporting good jobs at home, raising living standards and helping Americans provide for their families with affordable goods and services.