AnswersISP ONLY Economics S5000XXEconomic Development

Economic Development — Unit test Answers

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The graph shows US trade with China from 1990 to 2018.

Question illustration
A
The United States has a trade surplus with China.
B
China’s economy is declining, which has harmed trade.
C
The United States has a trade deficit with China.
D
China’s economy is improving, which has helped trade.
2
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Why might a country choose to devalue its currency?

A
to please its trading partners
B
to encourage exports
C
to encourage imports
D
to reduce taxes
3

Which describes the difference between a trade surplus and a trade deficit?

A
A trade surplus is when a country exports more than it imports, while a trade deficit happens when imports exceed exports.
B
A trade surplus is when a country imports more than it exports, while a trade deficit happens when exports exceed imports.
C
A trade surplus is when a country produces more than it consumes, while a trade deficit happens when consumption exceeds production.
D
A trade deficit is when a country loses money on products it makes, while a trade surplus happens when production leads to profits.
4

What type of economic growth do most developed economies experience?

A
rapid growth
B
unpredictable growth
C
moderate growth
D
slow growth
5

Which form of transportation has led to more efficient business in a global market?

A
helicopters
B
high-speed trains
C
tractor trailers
D
cargo ships
6

[BLANK]

A
National Export Initiative
B
FTA Tariff Tool
C
European Union
D
Association of Southeast Asian Nations
7

Why does an increase in literacy rates often accompany an increase in per capita income?

A
People who have higher-paying jobs often have the time available to develop literacy skills.
B
Developing countries have higher-than-average literacy rates, which typically leads to higher income.
C
People who can read and who receive an education are eligible for higher-paying jobs.
D
Developed countries often attempt to raise low literacy rates to improve income.
8

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

A
absolute advantage
B
isolation
C
competition
D
international trade
9

An exchange rate table makes it easy to compare the

A
different currency denominations used by a single country.
B
cost to produce the currency used by a single country.
C
value of the currencies for two or more countries.
D
unemployment rates for two or more countries.
10

In developed economies, less-educated workers

A
have more jobs to choose from.
B
are often more highly skilled than other workers.
C
may be outsourced to other nations.
D
can have difficulty finding work.
11

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

A
Businesses can take advantage of favorable laws to make products cheaply.
B
Businesses can take advantage of favorable taxes to make products cheaply.
C
Businesses can take advantage of new forms of technology to make products cheaply.
D
Businesses can take advantage of new forms of democracy to make products cheaply.
E
Businesses can take advantage of faster technology to make products faster.
12

A factory owner might decide to manufacture shirts in Pakistan instead of the United States because

A
it is less expensive to make shirts there.
B
it is worth paying more for foreign labor.
C
workers in Pakistan are more skilled.
D
workers in Pakistan work fewer hours.
13

How did NAFTA affect the economies of participating countries?

A
by creating unrestricted trade benefits
B
by raising employment rates and standards of living
C
by creating a balance of exports and imports
D
by increasing the overall volume of production
14

Why do developing countries usually have less variety in their economic activities?

A
Limited access to education means that people are not trained to work in industry or technology.
B
Focusing on one or two economic activities leads to more rapid economic development.
C
Developing countries are usually small and have limited populations and resources.
D
People prefer the lifestyle that accompanies traditional activities such as farming.
15

Which best describes the effect negative incentives have on a certain course of action?

A
They make the action impossible.
B
They make the action more profitable.
C
They make the action difficult.
D
They make the action less likely.
16

Which of these statements most accurately describes the use of currencies in different parts of the world?

A
Most countries use the dollar as their currency.
B
Countries in Asia use the euro as their currency.
C
Different countries use different currencies.
D
All countries are required to use the same currency.
17

An economic incentive is best described as something that

A
benefits producers or consumers when taking action.
B
pushes producers or consumers to act on the government's behalf.
C
motivates producers or consumers to take action.
D
forces producers or consumers to act in a certain way.
18

What is a benefit associated with free trade?

A
increased government revenue from tariffs
B
enhanced innovation and technology
C
limited market access for domestic industries
D
higher inflation due to import competition
19

A reason that countries trade with each other is

A
to help their neighbors.
B
to get products they cannot produce.
C
to sell goods they do not need.
D
to share excess resources.

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