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The Global Economy — Test Answers

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1
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What is the most likely conclusion that can be drawn about how this table would look in December 2013?

A
It would look different because more countries will have started to use euros.
B
It would look different because exchange rate tables change constantly.
C
It would look different because exchange rate tables change once a month.
D
It would look the same because exchange rate tables do not change.
2
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Based on the map, which is the best conclusion that can be drawn about the economies of the US and Western Europe?

A
The US and Western Europe are weak because they have low GDPs.
B
The US and Western Europe are weak because they have high GDPs.
C
The US and Western Europe are strong because they have low GDPs.
D
The US and Western Europe are strong because they have high GDPs.
3

What might be the best decision for Country A?

A
focus on the petroleum industry only
B
decide to find another industry to focus on
C
focus on the seafood industry only
D
focus both on its petroleum and seafood industries
4

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
5

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

A
an import advantage.
B
a comparative advantage.
C
an export advantage.
D
an absolute advantage.
6

The United States is said to have an absolute advantage in producing food compared with Japan. What does that mean?

A
It produces food at a higher cost than Japan.
B
It must import most of its food from Japan.
C
It produces food more efficiently than Japan.
D
It must export most of its food to Japan.
7

Which statement best describes how globalization is affecting the world?

A
The world is becoming more globalized and connected.
B
Globalization is growing less important as time passes.
C
Globalization has resulted in fewer connections among countries.
D
Countries are growing less likely to trade with one another.
8

Which statements best explain how globalization offers an advantage to businesses? Choose four correct answers.

A
Businesses can take advantage of faster technology to make products faster.
B
Businesses can take advantage of favorable taxes to make products cheaply.
C
Businesses can take advantage of new forms of democracy to make products cheaply.
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.
9

Why might a country choose to devalue its currency?

A
to reduce taxes
B
to please its trading partners
C
to encourage exports
D
to encourage imports
10

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

A
eliminated denominations for currency.
B
chose paper currency over coins.
C
shared the same currency.
D
agreed to use only two types of currency.
11

A country with an absolute advantage can produce a good or service

A
in twice the time as another country.
B
more efficiently than another country.
C
more slowly than another country.
D
less efficiently than another country.
12

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

A
oil
B
bananas
C
manufactured goods
D
electronics
13

Technologies that allow for instant worldwide communication include

A
high-speed trains and naval ships.
B
outsourcing and new trade markets.
C
mobile phones and Internet access.
D
airplanes and container shipping.
14

Who decides which currency each country in the world uses?

A
the United Nations
B
each individual country
C
the European Union
D
the United States
15

Which statement best describes how globalization connects the world?

A
Globalization helps create new forms of transportation, communication, and technology.
B
Globalization helps mandate new forms of transportation, communication, and technology.
C
Globalization helps share old forms of transportation, communication, and technology.
D
Globalization helps expand old forms of transportation, communication, and technology.
16

Why does the US import oil?

A
because it has exported too much oil to nearby countries
B
because it is cheaper to import oil than to produce it
C
because it needs higher quality oil than it produces
D
because it does not produce any oil at all
17

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

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

How does globalization cause the foreign sector to influence the economy?

A
The foreign sector influences how imports and exports move between firms and households.
B
The foreign sector influences how services move between firms and households.
C
The foreign sector influences how goods move between firms and households.
D
The foreign sector influences how factors of production move between firms and households.
19

Based on this graph, globalization has affected China’s workforce by creating a shift toward specialization in

A
agriculture, services, and industry.
B
agriculture and away from services.
C
services and away from agriculture.
D
industry and away from services.
20

The concept shown in the images is known as

A
factors of production.
B
exchange rates.
C
purchasing power parity.
D
gross domestic product.

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