Practice Economy Test 1

Which trade barrier blocks all trade between nations?

• an embargo

• a tariff

• a quota

• a sanction

How do governments invest in human capital?

• by providing tax incentives to build factories

• by providing job-training programs for citizens

• by providing home-buying incentives for families

• by providing housing for those that cannot afford it

How do investments in human capital help countries grow economically?

• by increasing the country's tax base

• by increasing the country's tax base

• by improving the country's manufacturing base

• by improving the skills of the the country's workforce

Sugar processing is one of Cuba's most important industries. However, production is often slowed by old, inefficient technology. Based on this information, what would would be the BEST way to improve the efficiency of Cuba's sugar industry?

• investing in capital goods

• investing in human capital

• reducing quotas on foreign sugar

• increasing tariffs on foreign sugar

For thousands of years, the Inuit of northern Canada have passed on the skills needed to survive in the frigid Arctic Circle. From an early age, children are taught to fish, hunt, and make tools. These skills are passed along from generation to generation. When the Inuit hunt, they typically share what they acquire with others in the community. This custom ensures that the Inuit can survive the long, cold winters with the resources they need to live.

What kind of economy BEST characterizes that practiced by the Inuit?

• command economy

• traditional economy

• mixed economy

• market economy

Which statement would MOST LIKELY be true in market economy?

• Most people enter the same field of employment as their ancestors.

• Economic production decisions are made by a small council of experts.

• The government provides employment and necessary resources for its people.

• Business owners decide what goods to produce and at what price to sell them.

For decades, the United States embargoed trade with Cuba. What was the result of imposing the embargo?

• Cubans were forced to pay a fee to trade with the United States.

• The United States and Cuba grew closer economically.

• The economies of both the United States and Cuba suffered.

• All trade between Cuba and the United States became illegal.

L.SS6E5.b

How are quotas different from embargoes?

• Quotas limit the volume of a good that can be imported, while embargoes prohibit the import of any amount of a good.

• Embargoes limit the volume of a good that can be imported, while quotas prohibit the import of any amount of a good.

• Embargoes are taxes on imported and exported goods, while quotas are limits on the number of goods that can be imported.

• Quotas are taxes on imported and exported goods, while embargoes are limits on the number of goods that can be imported.

How are quotas different from embargoes?

• Quotas limit the volume of a good that can be imported, while embargoes prohibit the import of any amount of a good.

• Embargoes limit the volume of a good that can be imported, while quotas prohibit the import of any amount of a good.

• Embargoes are taxes on imported and exported goods, while quotas are limits on the number of goods that can be imported.

• Quotas are taxes on imported and exported goods, while embargoes are limits on the number of goods that can be imported.

What is the purpose of specialization?

• to increase the efficiency of production

• to increase the volume of production

• to create a negative balance of trade

• to create an economic barrier to trade