AnswersEconomicsThe Global Economy

Practice Test Answers

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1
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Why do developing countries usually have less variety in their economic activities?

A
Limited access to education means that people are not trained to work in industry or technology.
B
Developing countries are usually small and have limited populations and resources.
C
People prefer the lifestyle that accompanies traditional activities such as farming.
D
Focusing on one or two economic activities leads to more rapid economic development.
2
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Which best describes the effect negative incentives have on a certain course of action?

A
They make the action less likely.
B
They make the action less profitable.
C
They make the action impossible.
D
They make the action difficult.
4

A reason that countries trade with each other is

A
to help their neighbors.
B
to get products they cannot produce.
C
to share excess resources.
D
to sell goods they do not need.
5

Why does an increase in literacy rates often accompany an increase in per capita income?

A
Developing countries have higher-than-average literacy rates, which typically leads to higher income.
B
People who can read and who receive an education are eligible for higher-paying jobs.
C
Developed countries often attempt to raise low literacy rates to improve income.
D
People who have higher-paying jobs often have the time available to develop literacy skills.
6

An economic incentive is best described as something that

A
motivates producers or consumers to take action.
B
pushes producers or consumers to act on the government's behalf.
C
benefits producers or consumers when taking action.
D
forces producers or consumers to act in a certain way.
7

What is a benefit associated with free trade?

A
limited market access for domestic industries
B
higher inflation due to import competition
C
enhanced innovation and technology
D
increased government revenue from tariffs
9

Globalization is the process of

A
limiting exhange of goods and services.
B
focusing on certain goods and services.
C
requiring or relying on something.
D
connecting the world over time.
10

Based on the graph, what conclusion can be drawn about trade between the United States and China?

A
The United States has a trade surplus with China.
B
The United States has a trade deficit with China.
C
China’s economy is declining, which has harmed trade.
D
China’s economy is improving, which has helped trade.

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