AnswersOC27 Economics-2102310-Sem-MeadowsCurrencies and Exchange Rates

Currencies and Exchange Rates — Unit test Answers

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Which factor plays a role in establishing the value of a country’s currency?

A
the attractiveness of the currency design
B
the location of the country
C
supply and demand
D
distance between countries
4

The Czech Republic’s decision in 2003 to join the European Union indicated that the Czech Republic

A
was now equal in wealth to all other European nations.
B
would give all economic control to the European Union.
C
was willing to forge economic ties with other nations.
D
would eventually achieve a mixed-market economy.
6

four

b
by shipping raw materials to manufacture goods in other countries
b
by shortening travel time
b
by opening up new trade markets worldwide
b
by connecting business partners the fastest
b
by increasing options for travel destinations
7

One sign of transition to a mixed-market economy is the establishment of

A
a fair labor market.
B
anti-poverty regulations.
C
state-owned business.
D
a smaller middle class.
9

Which of these statements most accurately describes currencies in North America?

A
All countries in North America use the US dollar.
B
All countries in North America use the euro.
C
North American countries have done away with separate currencies.
D
Each country in North America uses its own currency.
11

What is the purpose of quotas?

A
to ban all imports from a country
B
to ensure specific goods are not available to consumers
C
to limit how much of a good can be imported
D
to keep prices on domestic goods low
12

Which of these is a positive incentive for domestic producers?

A
a subsidy on imported cars
B
a tariff on cars
C
a subsidy on domestic oranges
D
a tariff on clothes
13

What kind of advantage does a country have if it can make a product more efficiently?

A
an import advantage.
B
an export advantage.
C
a comparative advantage.
D
an absolute advantage.
14

Globalization leads to more trade between

A
consumers.
B
businesses.
C
factories.
D
countries.
15

One social issue often facing developing countries is

A
democratic rule is easily obtainable.
B
reluctance to accept change.
C
a shortage of natural resources.
D
very high population growth.
18

How are subsidies similar to tariffs?

A
Both are types of taxes.
B
Both aim to lower the price of domestic goods.
C
Both are types of tax breaks and financial assistance.
D
Both allow domestic goods to compete against foreign goods.
19

Which best describes why countries establish limits on international trade? Choose three answers.to force domestic industries to sell higher quality goodsto restrict foreign influence in a sectorto restrict importation of a foreign goodto lower the price of foreign goodsto punish other countries

A
to force domestic industries to sell higher quality goods
B
to restrict foreign influence in a sector
C
to restrict importation of a foreign good
D
to lower the price of foreign goods
E
to punish other countries
20

International trade organizations promote free trade by encouraging countries to

A
maintain their tariffs.
B
establish their trade quotas.
C
reduce their trade barriers.
D
develop their products.

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