AnswersEconomicsThe Global Economy

The Global Economy — Test Answers

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Tariffs and subsidies are both types of

A
economic benefits for the international producer.
B
economic benefits for the consumer.
C
monetary restrictions for the domestic producer.
D
positive and negative incentives.
3
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According to this quotation, what did President Ronald Reagan believe about economic growth? "We should be trying to foster the growth of two-way trade, not trying to put up roadblocks, to open foreign markets, not close our own.”

A
Trade barriers would help make trade more fair.
B
Increased trade barriers would help the economy.
C
Free trade associations would limit competition.
D
Increased fair trade would help the economy.
4

Which process helps countries import things they cannot make while allowing them to specialize in exports?

A
absolute advantage
B
competition
C
international trade
D
isolation
5

What are standards designed to do? Choose three correct answers.

A
ensure safety
B
protect consumers
C
offer domestic industries an advantage
D
limit imports
E
support domestic industries
6

Which statement accurately describes a developing country?

A
The country has a high standard of living.
B
The country's population has a high growth rate.
C
The country has a high GDP per capita.
D
The country's population has a high life expectancy.
7

The Middle East is best associated with which internationally traded product?

A
oil
B
electronics
C
manufactured goods
D
bananas
8

Which statement best describes how globalization is affecting the world?

A
Globalization is growing less important as time passes.
B
Countries are growing less likely to trade with one another.
C
Globalization has resulted in fewer connections among countries.
D
The world is becoming more globalized and connected.
9

What is the most common reason why countries create trade agreements?

A
to limit imports
B
to decrease trade
C
to establish quotas
D
to create free trade
11

What type of economic growth do most developed economies experience?

A
rapid growth
B
unpredictable growth
C
slow growth
D
moderate growth
12

As of 2013, which of these countries had the highest GDP per capita?

A
Uganda
B
the United States
C
Brazil
D
Switzerland
13

International trade organizations promote free trade by encouraging countries to

A
maintain their tariffs.
B
develop their products.
C
limit their protectionism policies.
D
establish their trade quotas.
14

What do quotas and embargoes have in common?

A
They both frequently result in domestic shortages.
B
They both set limits on imported goods.
C
They both tend to raise prices.
D
They both affect imports from certain countries.
15

Why does the US import oil?

A
because it is cheaper to import oil than to produce it
B
because it has exported too much oil to nearby countries
C
because it needs higher quality oil than it produces
D
because it does not produce any oil at all
16

Which of these is a positive incentive for domestic producers?

A
a subsidy on domestic oranges
B
a tariff on cars
C
a tariff on clothes
D
a subsidy on imported cars
17

Which statement best describes how globalization connects the world?

A
Globalization helps mandate new forms of transportation, communication, and technology.
B
Globalization helps create new forms of transportation, communication, and technology.
C
Globalization helps share old forms of transportation, communication, and technology.
D
Globalization helps expand old forms of transportation, communication, and technology.
18

Technologies that allow for instant worldwide communication include

A
mobile phones and Internet access.
B
outsourcing and new trade markets.
C
high-speed trains and naval ships.
D
airplanes and container shipping.
19

Which statements best explain how globalization offers an advantage to businesses? Choose four correct answers.

A
Businesses can take advantage of new forms of democracy to make products cheaply.
B
Businesses can take advantage of new forms of technology to make products cheaply.
C
Businesses can take advantage of faster technology to make products faster.
D
Businesses can take advantage of favorable taxes to make products cheaply.
E
Businesses can take advantage of favorable laws to make products cheaply.
20

"GDP per capita" means that the GDP is calculated per

A
dollar.
B
country.
C
person.
D
day.
21

Trade agreements are helpful because they allow countries to

A
increase trade tax revenue.
B
trade for necessary goods.
C
help create new trade barriers.
D
influence foreign trade.
23

What might be the best decision for Country A?

A
focus both on its petroleum and seafood industries
B
focus on the seafood industry only
C
focus on the petroleum industry only
D
decide to find another industry to focus on

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