1. A product of the earth (“gift of nature”) that people use to meet their needs is a
A good.
B natural resource.
C free enterprise.
D service.
2. Which form of government would have the MOST amount of citizen participation?
A. a democracy B. an oligarchy
C. an autocracy D. a confederation
3. The economic system of communist countries is most closely related to which of the
following:
A Command economy.
B Market economy. C Traditional economy.
4. Which of these terms is the BEST synonym for the word "entrepreneur"?
A. "business owner
B. "home owner"
C. "employee"
D. "student“
5. In an autocratic (dictatorship) government, freedom of speech is usually
A protected by the government as a civil right
B guaranteed in the government's constitution
C censored and controlled by the government
D regulated only when it presents a clear and present danger
6. The type of government in which power rests with a small group of people is called
a(n)
A Democracy
B Oligarchy
C Autocracy
D Federal Republic
7. Which of the following is NOT one of the basic questions that all economic systems
must answer:
A What to produce?
B How to produce?
C How much to produce?
D For whom to produce?
8. A market economy is very different from a command economic system or a
traditional system. Which of the following is found in a market economy?
A Free labor
B Competition between businesses
C Government control of industry
D Government control of agriculture
9. Which is an example of human capital?
A Education
B Roads
C Factories
D Machinery
10. Who owns the resources in a command economy?
A the government
B no one
C individuals
D private businesses
11. What is an example of a physical trade barrier?
A quota
B tariff
C mountain
D embargo
12. How is the power distributed in a federal system of government?
A The central government has complete control.
B The individual states have complete control.
C The tribe leader shares control with the elders.
D The central government and the states share control.
13. In which type of government are citizens MOST likely to choose their leader?
A Dictatorship
B Oligarchy
C Democracy
D Monarchy
1. The number limit on how many items of a particular product can be imported from a particular
country is the
A demand.
B quota.
C supply.
D tariff.
2. What is evident of a country that has a parliamentary democracy?
A. The head of state and the head of government are two different people, one of which is the
prime minister.
B. The head of the country is always the King or Queen.
C. The head of state is the ayatollah.
D. The head of government is the president.
3. Which of the following would be MOST helpful to improving a country’s standard of living?
A. decreasing the literacy rate
B. increasing the literacy rate
C. reducing the number of farms
D. creating more low-paying jobs in factories
4. Brazil is building new schools and hospitals. These are examples of ___________.
A. opportunity costs.
B. Gross domestic product.
C. Investment in human capital.
D. Investment in capital goods.
5.
Cuba has not built new factories or used new technology in many years. What is the country NOT
investing in?
A. opportunity costs
B. natural resources C. human capital D. capital goods
6. Which trade barrier sets up a complete ban on trading between countries?
A mountain
B tariff
C quota
D embargo
7.
How are goods and services exchanged in a traditional economy?
A through prices and wages
B through government regulation
C through bartering
D through shortages and surpluses
8. Which of the following BEST describes a market system?
A The government provides services, such as telephones and television.
B A person can start any legal business and charge any price.
C The government provides food and housing to all workers.
D Businesses are owned by the government.
9. When a government decides to increase a tariff, it increases the amount of a tax placed upon
A people’s income.
B imported goods.
C renewable resources.
D people’s property.
10. Although specialization increases productivity, one disadvantage is
A. loss of flexibility among workers.
B. higher costs in training workers.
C. a reduction in wasted time.
D. the loss of training time.
11. All of these restrict international trade EXCEPT
A. quotas.
B. subsidies. C. embargoes.
D. trade deficits.
12. Why would the French government enact trade barriers, such as tarrifs and quotas, on imported
goods such as cheese and wine?
A. The French government would like for more French people to consume more imported
cheese and wine.
B. The French government would like for more French people to consume more domestic cheese
and wine.
C. The French government is trying to make all goods and services higher to increase overall
revenue.
D. The French would like to import as many consumer goods as possible because of increased
demand for Italian products.
1. This graph would MOST LIKELY be used
by one who
A. opposes the end to minimum wage
laws.
B. opposes stopping illegal
immigration.
C. supports the North American Free
Trade Agreement.
D. support the passage of import
duties on manufactured goods.
2.
3.
4.
5.
6.
7.
8.
9.
Which is an example of human capital?
A Education
B Roads
C Factories
D Machinery
This is an economic system where people follow the occupation of their ancestors:
A command.
B market.
C mixed.
D traditional.
Which situation is the BEST example of the concept of cooperation?
A. the creation of the North American Free Trade Agreement in 1994
B. the "Water War" that exists between Georgia, Alabama, and Florida
C. the 1991 Persian Gulf conflict and the 2003 U.S. invasion of Iraq
D. the embargo that the United States enforces against products from Cuba
What is the BEST definition of an embargo?
A. the prohibiting of trade between countries
B. an increase in exports from select countries
C. a situation of freely traded goods and services
D. the amount that can be legally imported into a country
An import quota is a
A. tax on import quantities above the legal limit.
B. way to increase tariff revenues for the exporting country.
C. Legal limit on the amount of a good that can be imported into a country.
D. legal incentive for members of WTO to increase their exports of a good or service.
A tariff is a tax on ___.
A. Exports
B. food
C. imports
D. services
Which statement BEST reflects the difference between tariffs and quotas?
A. Tariffs raise prices on exports, while quotas set limits on imports.
B. Tariffs raise prices on imports, while quotas set limits on exports.
C. Tariffs raise prices on exports, while quotas set limits on exports.
D. Tariffs raise prices on imports, while quotas set limits on imports.
Which of these BEST describes how the North American Free Trade Agreement (NAFTA)
encourages trade between member countries?
A. It sets quotas on items that the member countries can trade.
B. It puts tariffs in place to slow trade with non-member countries.
C. It reduces barriers and increases trade between member countries.
D. It allows member countries to decide what other countries can trade.
1. This map shows the member states of the European
Union (EU). Based on this map, what is the MOST
LIKELY reason the EU was formed?
A. to increase trade between European nations
B. B. to protect themselves from foreign enemies
C. to begin the process of forming one large nation
D. to isolate Europe from the rest of the
international community
2. Why is a system of currency exchange necessary for
international trade?
A. Nearly all world currencies are worthless on the
world market.
B. Those buying goods on the world market only
accept payment in gold and silver.
C. Most goods bought on the international market must be bought and paid for using United
States dollars only.
D. There must be a way to pay for goods purchased from countries with different types of
currencies due to Nationalism
3. In economics, often a nation has one product or industry that becomes better developed than other
products or industries. Over time, that nation may become known for being a reliable producer in
that industry. This is passage is describing
A. agriculture.
B. quotas.
C. specialization.
D. tariffs.
4. The United Kingdom Customs Service has found toxic lead-based paint in toys imported from a
Chinese toy-making company. These toys are intended for sale in the United Kingdom. Exposure to
the paint over a long period of time could be fatal to children under 6 years old. What type of trade
barrier would guarantee that no child in the United Kingdom would be exposed to the deadly lead
based paint?
A. quota
B. tariff
C. embargo
D. exchange rate
5. The purpose of the founding of the European Union (E.U.) in 1993 was to
A. prevent a revolution in European countries.
B. fight the growing global network of terrorism.
C. lessen the strength of small European nations.
D. Reduce trade barriers and encourage cooperation among European nations.
6. Why would a country want to erect trade barriers such as tariffs or quotas?
A. to make goods cheaper
B. to expand their markets
C. to protect domestic jobs
D. to stimulate the economy
7. Which of these is TRUE about specialization in an economy?
A. People make the goods that other people want.
B. The government decides who can exchange goods.
C. Companies force people to participate in the economy.
D. Leaders require a certain number of exchanges per day.
8. When a government decides to increase a tariff, it increases the amount of a tax placed upon
A people’s income. B imported goods.
C renewable resources.
D people’s property.
9. What is a main reason for people to exchange currency?
A to have foreign money
B to use American dollars to trade
C to make more money by trading currencies
D to buy and sell goods and services with other countries