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International Economics — Test Answers

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How has a change in internet access from 2003 to 2019 most likely affected globalization?

A
A 40 percent decrease in internet access has most likely had little effect on globalization.
B
A 50 percent increase in internet access has most likely sped up globalization.
C
A 30 percent increase in internet access has most likely had little effect on globalization.
D
A 60 percent decrease in internet access has most likely slowed down globalization.
2
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Why do countries provide financial incentives?

A
Financial incentives restrict all trade.
B
Financial incentives limit imports.
C
Financial incentives act as trade barriers.
D
Financial incentives set standards.
3

International trade organizations promote free trade by encouraging countries to

A
limit their protectionism policies.
B
maintain their tariffs.
C
establish their trade quotas.
D
develop their products.
4

Why might a country choose to devalue its currency?

A
to reduce taxes
B
to encourage exports
C
to please its trading partners
D
to encourage imports
5

Why does the US import oil?

A
because it needs higher quality oil than it produces
B
because it is cheaper to import oil than to produce it
C
because it has exported too much oil to nearby countries
D
because it does not produce any oil at all
6

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

A
isolation
B
international trade
C
competition
D
absolute advantage
7

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

A
to establish quotas
B
to decrease trade
C
to limit imports
D
to create free trade
8

Which of these is a positive incentive for domestic producers?

A
a tariff on clothes
B
a subsidy on imported cars
C
a subsidy on domestic oranges
D
a tariff on cars
11

Who decides which currency each country in the world uses?

A
each individual country
B
the United States
C
the United Nations
D
the European Union
12

There would be no separation between one country’s economy and another’s if the entire world

A
chose paper currency over coins.
B
eliminated denominations for currency.
C
shared the same currency.
D
agreed to use only two types of currency.
13

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 favorable taxes to make products cheaply.
C
Businesses can take advantage of faster technology to make products faster.
D
Businesses can take advantage of favorable laws to make products cheaply.
E
Businesses can take advantage of new forms of technology to make products cheaply.
15

An outline for an informative essay should

A
use smooth transitions.
B
state the main topics.
C
use effective language.
D
include all relevant details.
16

Technologies that allow for instant worldwide communication include

A
airplanes and container shipping.
B
mobile phones and Internet access.
C
outsourcing and new trade markets.
D
high-speed trains and naval ships.
17

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

A
North American countries have done away with separate currencies.
B
All countries in North America use the US dollar.
C
Each country in North America uses its own currency.
D
All countries in North America use the euro.
18

The purpose of an outline for an informative essay is to

A
use effective language.
B
include strong paragraphs.
C
cite research materials.
D
explain the essay’s structure.
19

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

A
oil
B
electronics
C
manufactured goods
D
bananas
20

Tariffs and subsidies are both types of

A
monetary restrictions for the domestic producer.
B
economic benefits for the consumer.
C
economic benefits for the international producer.
D
positive and negative incentives.
21

Which statement best describes how globalization connects the world?

A
Globalization helps share old forms of transportation, communication, and technology.
B
Globalization helps mandate new forms of transportation, communication, and technology.
C
Globalization helps expand old forms of transportation, communication, and technology.
D
Globalization helps create new forms of transportation, communication, and technology.
22

Which statement best describes how globalization is affecting the world?

A
Countries are growing less likely to trade with one another.
B
Globalization is growing less important as time passes.
C
Globalization has resulted in fewer connections among countries.
D
The world is becoming more globalized and connected.
23

Trade agreements are helpful because they allow countries to

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

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