2018 Economic Review

Saudi Arabia is an autocratic monarchy where the king has absolute power over every aspect of the law and government. Despite this, Saudi Arabia still does not have a pure command economy.

• Kings usually choose to allow their countries free markets.

• Command economies can only work in very isolated areas.

• International treaties forbid the king from controlling the market.

• The king cannot foresee or meet every demand that arises in his country.

How could investment in capital goods increase Nigeria’s GDP AND decrease its GDP per capita?

• Capital goods produce factories which only create low-paying jobs.

• More efficient technology will increase productivity while decrease the number of workers needed.

• Unskilled workers will be laid off from their jobs because they do not know how to use the new technology.

• The expense of investing in new technology will force the government to invest less money in human capital.

If the standard of living in Turkey decreases rapidly, what other measure is likely to decrease along with the standard of living?

• Literacy rate

• Economic freedom

• Percentage of workforce in services

• Percentage of workforce in industry

India and South Korea both have growing technological economies. Japan already has a highly developed technological economy. What can India and South Korea do to BEST protect their growing markets?

• Refuse to import any goods from Japan for 5 years.

• Seek out foreign employees who already have experience in technology.

• Hire advertising firms to promote Indian and South Korean technology as superior to Japanese technology.

• Impose high taxes on goods imported from Japan to make domestic technology more affordable than Japanese technology.

Parts of India have abundant farmland, but little industry. What course of action should India take to meet its needs?

• India should adopt a traditional economy.

• India should invest in capital goods and industrialize.

• India should invest in human capital and train engineers.

• India should specialize in agriculture and trade for industrial goods.

If Japan has a mostly market economy, what does that mean for the lifestyles of Japanese citizens?

• Japanese citizens all enjoy a high standard of living.

• Japanese citizens have no safety net if they become disabled.

• Japanese citizens change jobs often to meet new market demands.

• Japanese citizens must make choices about how to spend their income.

Why does the OPEC tell members nations how much oil they may export each year?

• To control the global oil supply and keep prices competitive.

• To control enough of the global oil supply to remain competitive.

• To prevent prices for oil from becoming so high that non-OPEC nations seek out other fuel sources.

• To prevent other member nations from becoming wealthy enough to challenge Saudi Arabia’s leadership.

Which lists correctly orders SE Asian nations from MOST to LEAST open to entrepreneurship?

• Japan, South Korea, India, China, North Korea

• North Korea, South Korea, Japan, India, China

• China, India, Japan North Korea, South Korea

• Japan, India, South Korea, China, North Korea

In 2016, each U.S. dollar was equal to about 14 South African rands. In 2013, each U.S. dollar was only equal to about 7 South African rands. What does this imply about the use of different currencies in international trade?

• Trade btwn. The U.S. and South Africa always benefits South Africa.

• Trade btwn. The U.S. and South Africa always benefits the U.S.

• Currencies change value at different rates and may change trade relationships when they change.

• Currencies change value whenever their trading partners’ currencies change so they maintain a constant relationship.

The average income per capita in Japan decreased 4.3% in 2016. What would be a reasonable prediction about what happened to the average household savings at this time?

• The average household savings went up because people had to be more careful with their money.

• The average household savings went down because people could no longer afford to put money in savings.

• The average savings remained static because prices adjust to match the average income in a country.

• The average household savings remained static because the percent of change in average household income was so small.