Africa Economic Understandings

What is a tariff?

• a tax paid by purchaser when goods are sold

• a tax placed on goods coming into one country from another

• a tax placed on goods made by local craftsmen or manufacturers

• a fee paid when goods are shipped from one US state to another

What is a quota?

• a limit placed on the amount of foreign goods being imported.

• a tax placed on goods coming into the country from another country.

• a decision to prevent certain goods from being imported at all.

• a tax placed on goods when they are purchased in the market place.

Why is a system of currency exchange necessary for international trade?

• Nearly all world currencies are worthless on the world market.

• Those buying goods on the world market want to be paid in gold and silver.

• Most goods bought on the international market must be paid for in US dollars.

• There must be a way to pay for goods purchased from countries with different types of currencies.

Why has South Africa made a big investment in human capital?

• South Africa has no natural resources to develop.

• They were forced to provide training and education by the United Nations.

• Some of that country's most important industries need educated, skills workers.

• Most schools and universities are free because of foreign investment in the country

In which area of capital goods has South Africa invested heavily?

• agriculture

• space technology

• oil production and refining

• mining and heavy industry

In which area of capital goods has Nigeria heavily invested?

• agriculture

• mining and heavy industry

• oil production and refining

• communications technology

Which is a result of Nigeria's focus on the oil industry?

• the country's lack of a good army

• the country's need for new currency

• lack of improvements in agriculture

• oil production has caused no problem

Why do most economies in the world today operate somewhere in between a market economy and a command economy?

• Most economies have found they need a mix of free market and some government control to be successful and protect consumers.

• Government control always makes a market economy profitable.

• Most consumers prefer government control to a free market system.

• Government control of some aspects of the economy has never been successful in the modern world.

Why is specialization so valuable in the international trade today?

• Most countries can only make one product very well.

• Specialization allows people to do a more efficient job at producing what they make best and trade for things they want or need.

• Most countries can only make one product very well.

• Specialization always keeps the prices low on goods that are imported into a country.

How is Kenya's economy different from Nigeria and South Africa?

• Kenya has a command economy that does not allow trade with other countries.

• Kenya is the traditional economy of East Africa and cannot trade with countries that specialize in technology.

• Kenya is the economic, financial, and transport hub of East Africa.

• Kenya specializes in the export of diamonds, where South Africa specializes in oil.