AnswersOC27 Economics-2102310-Sem-MeadowsEconomic Development

Economic Development — Unit test Answers

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1
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What is a benefit associated with free trade?

i
increased government revenue from tariffs
e
enhanced innovation and technology
l
limited market access for domestic industries
h
higher inflation due to import competition
2
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National Export InitiativeFTA Tariff ToolEuropean UnionAssociation of Southeast Asian Nations

A
National Export Initiative
B
FTA Tariff Tool
C
European Union
D
Association of Southeast Asian Nations
3

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

L
Limited access to education means that people are not trained to work in industry or technology.
F
Focusing on one or two economic activities leads to more rapid economic development.
D
Developing countries are usually small and have limited populations and resources.
P
People prefer the lifestyle that accompanies traditional activities such as farming.
4

An exchange rate table makes it easy to compare the

A
different currency denominations used by a single country.
B
cost to produce the currency used by a single country.
C
value of the currencies for two or more countries.
D
unemployment rates for two or more countries.
5

The North American Free Trade Agreement created a free trade zone between Canada, the United States, and .

Answer not available
6

A factory owner might decide to manufacture shirts in Pakistan instead of the United States because

i
it is less expensive to make shirts there.
i
it is worth paying more for foreign labor.
w
workers in Pakistan are more skilled.
w
workers in Pakistan work fewer hours.
7

What type of economic growth do most developed economies experience?

A
rapid growth
B
unpredictable growth
C
moderate growth
D
slow growth
8

most

M
Most countries use the dollar as their currency.
C
Countries in Asia use the euro as their currency.
D
Different countries use different currencies.
A
All countries are required to use the same currency.
9

If the value of the US dollar declines in relation to other currencies, goods imported into the United States will

A
not be allowed to enter the country.
B
become less expensive.
C
remain the same in price.
D
become more expensive.
10

How did NAFTA affect the economies of participating countries?

A
by creating unrestricted trade benefits
B
by raising employment rates and standards of living
C
by creating a balance of exports and imports
D
by increasing the overall volume of production
11

Why might a country choose to devalue its currency?

A
to please its trading partners
B
to encourage exports
C
to encourage imports
D
to reduce taxes
12

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

P
People who have higher-paying jobs often have the time available to develop literacy skills.
D
Developing countries have higher-than-average literacy rates, which typically leads to higher income.
P
People who can read and who receive an education are eligible for higher-paying jobs.
D
Developed countries often attempt to raise low literacy rates to improve income.
13

A reason that countries trade with each other is

t
to help their neighbors.
t
to get products they cannot produce.
t
to sell goods they do not need.
t
to share excess resources.
14

In developed economies, less-educated workers

h
have more jobs to choose from.
a
are often more highly skilled than other workers.
m
may be outsourced to other nations.
c
can have difficulty finding work.
15

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

a
absolute advantage
i
isolation
c
competition
i
international trade

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Economic Development — Unit test Answers — OC27…