AnswersEconomicsInternational Trade

Practice Test Answers

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1
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Which of these statements most accurately describes the use of currencies in different parts of the world?

A
Countries in Asia use the euro as their currency.
B
All countries are required to use the same currency.
C
Most countries use the dollar as their currency.
D
Different countries use different currencies.
2
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An economic incentive is best described as something that

A
motivates producers or consumers to take action.
B
forces producers or consumers to act in a certain way.
C
pushes producers or consumers to act on the government's behalf.
D
benefits producers or consumers when taking action.
3

A reason that countries trade with each other is

A
to get products they cannot produce.
B
to sell goods they do not need.
C
to share excess resources.
D
to help their neighbors.
4

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

A
Focusing on one or two economic activities leads to more rapid economic development.
B
Limited access to education means that people are not trained to work in industry or technology.
C
People prefer the lifestyle that accompanies traditional activities such as farming.
D
Developing countries are usually small and have limited populations and resources.
5

How did NAFTA affect the economies of participating countries?

A
by raising employment rates and standards of living
B
by creating a balance of exports and imports
C
by increasing the overall volume of production
D
by creating unrestricted trade benefits
6

Which form of transportation has led to more efficient business in a global market?

A
cargo ships
B
helicopters
C
high-speed trains
D
tractor trailers
7

What is a benefit associated with free trade?

A
increased government revenue from tariffs
B
limited market access for domestic industries
C
higher inflation due to import competition
D
enhanced innovation and technology
8

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

A
Developed countries often attempt to raise low literacy rates to improve income.
B
People who have higher-paying jobs often have the time available to develop literacy skills.
C
Developing countries have higher-than-average literacy rates, which typically leads to higher income.
D
People who can read and who receive an education are eligible for higher-paying jobs.
9

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

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

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