Unit 5 - Economy of SWA

What are the three types of economic systems?

• autocracy, democracy, theocracy

• traditional, market, command

• direct, parliamentary, presidential

• direct, representative, democratic

Since almost all economies have characteristics of market and command systems, most economies are known as...

• mixed on the economic continuum.

• traditional on the economic continuum.

• free on the economic continuum.

• oppressed on the economic continuum.

Which trade barrier is NOT correctly matched to its definition?

• Quota: a limit placed on the amount of a product that can be imported

• Tariff: a tax on an item that is imported

• Sanction: a financial incentive paid by the government

• Embargo: a ban on trading with another country

What is an example of specialization?

• Saudi Arabia limits the amount of olives it imports from Turkey.

• Iran refuses to export oil to Iraq due to the Sunni / Shia conflict.

• Israel produces technology because it does not have many natural resources.

• Turkey pays doctors a subsidy because there is a shortage of medical professionals.

The total value of all goods and services produced within a country during a year is known as...

• Human capital or human resources

• Capital goods or capital resources

• Gross Domestic Product

• Mixed Economy

Which economic term & definition are not properly matched?

• human capital / human resources: the education, skills, and training people need to do their job

• capital goods / capital resources: items such as factories, machinery, and technology that people need to do their job

• currency: spending money to make a profit

• standard of life: the quality of life based on necessities and luxuries that make life easier.

Which of the following is an example of investment?

• Saudi Arabia installs new drilling equipment in the Persian Gulf to obtain more oil supplies.

• David exchanges his Israeli shekels (currency) for Iranian rials (currency) when he travels for business.

• Turkey imports oil from Iran; Iran imports technology from Israel.

• The Israelis refuse to export agricultural crops to the Palestinian Arabs.

How has the discovery of oil in the Middle East impacted the economy?

• This is a trick question! The discovery of oil has NOT impacted the economy.

• Every country in the Middle East is very wealthy due to oil reserves.

• There is a gap between countries with oil and those without; countries with oil are much wealthier than those without.

• Despite the high prices we pay at the gas station, all of the countries in the Middle East are still very poor.

What is the purpose of OPEC?

• to discover new sources of oil

• to control the supply & price of oil

• to educate the world about alternative sources of energy other than oil

• to reduce the amount of oil consumed

What is the relationship between supply and demand?

• high supply = high prices

• high demand = low prices

• low demand = high prices

• low supply = high prices