Unit 6 Test

In which country would it be easier for a person to start her or his own business?

• Cuba

• Brazil

• Canada

• About the same in each

What would make Canada a more desirable place to start a business than Brazil?

• Starting a new business does not take very long.

• Companies have freedom to decide what to produce.

• Property rights are protected by strong laws and courts.

• All of these

Which country has the least freedom to do business?

• Cuba

• Brazil

• Canada

Which of the following explanations would reflect a country with a mixed economy (i.e., between a pure market and pure command)?

• Prices and wages are solely regulated by a country’s government.

• A combination of privately-owned industry and government control.

• A country’s distribution of resources is based on inheritance.

• Prices and wages are determined by the laws of supply and demand rather than being regulated by a country’s government

Which statement describes the economy of Brazil?

• Brazil has a pure market economy.

• Brazil has a pure command economy.

• Brazil has a moderately free economy with large amounts of government regulations

• Brazil is mostly a command economy, but the government allows some farmers to sell some of their goods on their own.

How does investment in capital goods by companies help a country increase its GDP?

• The GDP of a country goes down when companies make more money.

• Companies that invest in capital goods are able to provide a better place for their workers to work

• Highly trained workers help the company be more profitable by finding ways to help the company work better.

• When a company invests in capital goods, it can produce more goods at a better price and increase the profit that it makes.

What is an advantage of specialization?

• Factories cannot produce goods as quickly

• Workers do not become experts in their jobs

• A factory can produce more goods in less time and for less money

• Businesses cannot sell as many types of goods when they specialize

The box for “Entrepreneur” is at the top of the diagram because it shows that the entrepreneur is

• first in the alphabet compared to the other words

• dependent on other people to make the business successful

• most important in organizing all other resources for a successful business.

• interested in making sure that the people in the business are well trained for the job

Canada and Mexico are SIMILAR in that lowering trade barriers between these two nations has resulted in both nations experiencing

• growth in their economies

• increases in unemployment

• increases in the prices of consumer goods

• decreases in quality of consumer goods

In a Latin American country, the literacy rate is about 49%. Which statement best reflects the country’s investment in human capital?

• The low investment in human capital lowers the GDP per capita.

• The country has greater opportunity for other capital investments than education.

• Their country’s GDP per capita would decrease if there was more investment in human capital.

• The country’s high investment in human capital lowers the GDP per capita.