Unit 4: Quiz

A country can produce grapes at a lower opportunity cost than its trading partners. When trading grapes, the country would have a(n): A. comparative advantage B. Trade deficit C. Comparative advantage D. Trade surplus

A

How did the 1973 oil crisis affect the United States? A. oil suffered from high levels of inflation B. oil prices suffered from deflation as a result of an embargo C. Trade remained stagnant even as economic growth continued D. Trade increased as a result of wars in the Middle East

A

The United States is considered to have a high standard of living because: A. most of its citizens have access to necessities like food B. its currency is no longer tied to precious metals like gold C. a large number of its citizens struggle to find good jobs D. the most important sectors if its economy are agricultual

A

What is one major drawback of globalization? A. Poor workers in developing countries may not share in economic gains B. Environmental regulations have gotten in the way of economic growth. C. Businesses have access to fewer markets when selling their products. D. Inflation rates have declined significantly because of increased global trade.

A

Which development would most likely reduce the standard of living in the United States? A. US factories begin to produce far fewer goods B. The U.S. government returns to the gold standard. C. Wages increase for most American workers. D. It becomes easier for U.S. citizens to get health care.

A

Which factor played the most important role in the expansion of economic connections between countries since the mid-20th century? A. advances in technology B. International efforts to protect the environment C. Rapid inflation in most countries D. Reduced trade between neighboring countries

A

Which situation best illustrates how global trade promote specialization? A. A country imports food and medicine from its neighbors so that its workers can focus on making cars B. A country sets strict limits on the amount of goods it can import from other countries in a single year. C. A country ensures that it will not become too reliant on trade by producing all of its own food and clothing D. A country tries to export as many goods as possible by making a huge variety of different products.

A

Which statement best describes the economic position of the United States in the modern world economy? A. The United States has the world's largest and most influential economy B. The United States has the world's lowest overall standard of living. C. The United States is the world's only remaining country on the gold standard. D. The United States is the world's most economically isolated country.

A

Which statement best explains why the United States grew into a world economic power in the 20th century? A. The United States increased its participation in international trade B. The United States stayed out of major world wars and instead made economic investments. C. The United States put effective trade barriers in place to limit trade with other nations D. The United States prevented other countries from abandoning the gold standard

A

A country exports goods and services valued at $300 million in a year. During that same year, the country imports goods and services valued at $400 million. What conclusion best describes the country's balance of trade? A. The country has a trade surplus B. The country has a trade deficit. C. The country has established an absolute advantage. D. The country has established a comparative advantage.

B

How does comparative advantage influence international trade? A. Comparative advantage helps countries produce a wide variety of goods for trade B. Comparative advantage determines which goods a country should produce for export. C. Comparative advantage encourages countries to limit the foreign goods they import. D. Comparative advantage restricts the possible trade partners for most countries.

B

How has technology affected globalization in the 20th century? A. New farming technology has made people more likely to sell produce in local markets B. New shipping technology has made it cheaper to send goods to other countries. C. New construction technology has allowed cities to grow larger than ever before. D. New computer technology has made it more expensive to start new businesses

B

What economic problem did many countries face as a result of World War II? A. A global economic depression that devastated economies B. High levels of inflation that made money worthless C. High levels of deflation that led to a fall in production D. A period of no economic growth but rising inflation

B

What happened when many countries left the gold standard in the mid-20th century? A. Most countries gave up their own currencies B. Demand for US dollars increased C. The U.S standard of living declined D. The value of gold was greatly reduced

B

What should a country that wants to increase its comparative advantage when trading with another country try to do? A. Reduce its trade deficit with all of its other trading partners B. Lower the opportunity cost of producing the goods it trades C. Produce more of a valuable good than the other country D. Raise the price of its exports to generate more capital

B

Which factor contributed to the growth of the US economy during the 20th century? A. The United States continued to use the gold standard B. The United States became an industrial leader. C. The United States suffered heavy losses in World War I. D. The United States cut off trade with foreign countries.

B

Which sentence best completes the diagram? The Bretton Woods system begins ->________________________________ A. The United States refuses to allow US dollars to be spent in foreign markets B. Countries tie their currencies to the value of the U.S. dollar. C. The standard of living in the United States begins to fall rapidly. D. International demand for U.S. dollars reaches its lowest point in history

B

Which situation best illustrates globalization's effect on an economy? A. A construction worker in German builds a new skyscraper near his home city B. A factory in Mexico makes toys that are sold mostly in Asia. C. A U.S. software company develops a smartphone with an improved camera. D. An Italian baker sells cakes to local families for many special occasions.

B

Which situation best illustrates the effects of inflation? A. A factory lowers its employee's wages to $8 per hour B. The price of beef at a store rises by $2 a pound over five years. C. A business owner receives a $10,000 loan from a bank. D. A fashion company lowers the price of its outfits by 20 percent.

B

Why is international trade important for economies around the world? A. Trade protects countries' domestic industries from foreign competitors B. Trade allows countries to specialize instead of producing all the goods they need. C. Trade prevents any one country from establishing an absolute advantage over others. D. Trade encourages countries to invest in a huge variety of different industries

B

Why was the US dollar important to the international economics in the mid 20th century? A. Businesses were only able to use U.S. dollars when buying foreign goods. B. Countries valued the U.S. dollar highly because of the gold standard. C. The U.S. dollar was the first currency to become a fiat currency. D. Most countries replaced their own currency with the U.S. dollar.

B

A country that produces more of a good or service than another country has a(n) __________ advantage A. comparative B. import C. absolute D. surplus

C

One major negative effect of globalization has been: A. less investment in communication technologies B. fewer jobs in the shipping and packaging industries C. Environmental damage due to increased production. D. more military conflicts between powerful nations

C

Since the mid-20th century, globalization has resulted in: A. a decline in trade between countries on different continents B. rapid inflation that has devastated most world economies. C. economies around the world becoming more connected. D. significant improvements to the environment in most countries.

C

Two countries produce coal and iron. Country A can produce a maximum of 500 tons of coal per day or 250 tons of iron. Country B can produce a maximum of 900 tons of coal per day or 300 tons of iron. Which statement best describes this situation? A. Country A has an absolute advantage producing coal. B. Country A has an absolute advantage producing iron. C. Country A has a comparative advantage producing iron. D. Country A has a comparative advantage producing coal.

C

What is a major advantage of globalization ? A. consumers are able to support their local economies more easily B. Economies around the world no longer have to deal with inflation C. Businesses are able to sell products to customers around the world D. Fewer companies are creating pollution by shipping goods long distances

C

What problem does the United States face when compared to other developed countries? A. Limited access to goods from other countries B. A low gross domestic product C. Falling levels of homeownership D. High levels of unemployment

C

What was a major effect of the US dollar becoming a substitute for gold in international currency markets? A. The US dollar quickly lost its value and was replaced by other foreign currencies B. The world suffered the worst economic crisis since the Great Depression. C. Growing demand for U.S. dollars led the country to abandon the gold standard D. Standards of living rose substantially in most European developing countries.

C

When a country has a trade deficit, the value of its exports is ________ the value of its imports A. unconnected to B. Equal to C. less than D. more than

C

When compared to most other developed countries, the United States: A. is more likely to rely on the gold standard B. has a higher standard of living C. has a higher gross domestic product. D. has a higher rate of unemployment.

C

When the United States used a gold standard, the US dollar: A. was considered one of the least valuable currencies in the world B. could not be spent in any country outside the United States. C. had its value tied to the amount of gold in U.S. reserves. D. only existed as gold coins rather than paper money.

C

Which characteristic of globalization deals with the effects it has on workers in different countries? A. resource distribution B. trade C. labor marker D. technology

C

Why is international trade important to most countries? A. trade protects countries from economic competition with neighboring countries B. Trade encourages countries to produce all the goods their citizens need. C. Trade allows countries to acquire natural resources not found in their own territories. D. Trade ensures that countries will not create trade deficits that harm their economies.

C

A country has a large number of highly advanced factories for producing cars. However, it does not have any resources of rubber to make wheels for the cars. Therefore, it has to import rubber from other countries. This situation best illustrates which factor that encourages global trade? A. Eliminating trade deficits B. Allowing for specialization C. Lowering opportunity cost D. Acquiring natural resources

D

The chart shows how many carrots or apples two countries could each grow if they devoted all of their farming resources to one product. Considering the comparative advantage each country has in this situation, which outcome would be most likely? - Number of carrots grown per day: + Country A: 40,000 + country B: 20,000 - Number of apples grown per day: + Country A: 10,000 + country B: 10,000 A. Country A would have a trade surplus; country B would have a trade deficit. B. Country A would have a trade deficit; country B would have a trade surplus. C. Country A would focus on growing apples; country B would focus on growing carrots. D. Country A would focus on growing carrots; country B would focus on growing apples.

D

What happens to a country when it undergoes inflation? A. Trade with other countries mostly stops B. Companies begin hiring many more employees. C. Governments regulate businesses more strictly. D. Goods increase in price year after year.

D

What statement best describes how income levels have changed in the United States? A. Income levels have fallen in line with a sharp increase in inflation B. The gap between high-income earners and other Americans has shrunk C. All Americans have seen rising levels of income that have matched economic growth D. High- income earners are making more, but most people have seen only limited gains

D

Which phrase best completes the diagram? * Feature of developing countries: - low gross domestic product - limited access to luxury goods - ________________ A. high unemployment rate B. High standard of living C. Currency on the gold standard D. Low per capita income

D

Which phrase best completes the diagram? Globalization -> _____________ A. more equal distribution of natural resources B. decreased competition for small businesses C. Improved incomes for poor people in all countries D. Increased demand for natural resources

D

Which situation best illustrates the concept of absolute advantage? A. The total value of Chinese exports is much greater than the value of the country's imports B. Efficiency at a Thai car factory has declined due to the rising cost of steel. C. A beach in Egypt has become a popular attraction for tourists from many countries. D. A French shop produces more wooden clocks than its competitors.

D

inflation affects an economy by: A. limiting international trade opportunities B. reducing the size of the labor market. C. increasing the value of currency. D. making prices rise over time,

D

The table shows the total number of ships and planes two countries could each produce if they fully devoted their economic resources to producing one or the other. The data in the table most support which conclusion? - Number of ships produced per day + Country A: 100 + Country B: 50 - Number of planes produced per day + Country A: 50 + Country B: 20 A. Country A has a comparative advantage producing planes B. Country B has an absolute advantage producing ships C. Country A has a comparative advantage producing ships D. Country B has an absolute advantage producing planes

Not C