Review for your test Monday 2/8/21

Which country MOST LIKELY has the LOWEST standard of living?

• a country that imports foreign goods

• a country with a command economy that invests little in capital goods

• a country with a high literacy rate that invests heavily in human capital

• a country that raises revenue by imposing high tariffs on international trade

If a country wanted to try and force a country to change it's policy what type of trade barrier might it place on it?

• tariff

• quoto

• embargo

• none of the above

What is the number one way a country can increase economic development?

• invest in human capital (education)

• invest in capital goods (education)

• invest in governmental education

• invest in the military

Can a low literacy rate increase a country's economic development (GDP)?

• yes

• no

How does investment in capital goods relate to a country's economic output?

• Investment in capital goods generally causes an increase in gross domestic product (GDP) by increasing the size of the labor force.

• Investment in capital goods generally causes an increase in gross domestic product (GDP) by increasing the amount of products that the country can export.

• Investment in capital goods generally causes a decrease in gross domestic product (GDP) by increasing the debt of companies that make the investment.

• Investment in capital goods generally causes a decrease in gross domestic product (GDP) by increasing the overhead costs of companies that make the investment.

John lives in Brazil. He has just returned home from a trip to the United States. Jacques still has five US dollar bills left from his trip. When he tries to use them to buy lunch, the restaurant will not take the US dollars. Why did the restaurant refuse to take the money?

• because the US dollar is not legal (tender) in Brazil

• because the stores in Brazil only accept the peso

• because Brazil only barters for their goods due to being a traditional economy

• because he left his reals at home

Bolivia and the United States are trading partners. Some of the main goods the United States exports to Bolivia are agricultural products and machinery. Bolivia specializes in pineapples, pork, and silver.

Question: What would happen if the United States placed an embargo on Colombia?

• the price of pork and silver from Bolivia would go up

• the price of pineapples, and pork from Bolivia would go down

• people in Bolivia would not be able to sell pineapples or pork to other countries

• people in the United States would not be able to buy pineapples or pork from Bolivia

Under normal circumstances, which of these situations is MOST LIKELY to occur in a command economy?

• The government was unhappy with the safety of its country's coal mines, so it set a minimum age for workers and required each mine to undergo government safety inspections

• The government was unhappy with the production of its country's coal mines, so it offered government contracts to private business, including bonuses for high production levels.

• The government was unhappy with the safety of its country's coal mines, so it limited the amount of weekly hours that workers were allowed to work in the mines.

• The government was unhappy with the production of its country's coal mines, so it took over the mines and staffed them with soldiers from the armed forces.

Which of the following is MOST likely to happen in a market economy?

• Buyers and sellers decide what is produced and who receives the goods.

• Consumers have only a limited range of products from which to choose.

• Resources are divided up according to orders by the government.

• The profits a business makes are collected by the government.

What was the purpose of the North American Free Trade Agreement (NAFTA) between the United States, Mexico, and Canada?

• raise environmental standards

• increase trade and eliminate tariffs

• allow people to move freely between the countries.

• create a military partnership between the countries.