USA and CANADA OBJ. 4

NAFTA is an agreement among the U.S., Canada, and Mexico primarily intended to promote

• free trade.

• human rights.

• military defense.

• environmental protection.

Which situation BEST illustrates the concept of the interdependence(depending on each other) among nations?

• sales of goods by one nation to obtain resources from another nation.

• adoption of a policy of economic nationalism.

• expansion of international sporting events.

• establishment by a nation of a system of high protective tariffs.

Which scenario shows the results of competition in a free enterprise system?

• A business publishes safety information about a product because of state laws.

• Two companies merge to control the market share in an economic sector.

• A personal computer company must use a different song in its ads due to copyright laws.

• The price of personal computers decreases as more companies develop computers.

Which statement describes a role of government in a free enterprise system?

• controlling career paths for citizens

• encouraging citizens to become entrepreneurs

• determining which goods should be produced

• deciding which businesses are needed

Which result is a benefit of the free enterprise system?

• Government officials ensure wealth and resources are distributed efficiently.

• International trade creates a dependency among economic partners.

• Individuals have the freedom to choose what to produce and consume.

• Monopolies ensure the profitability of specific economic sectors.

What is one negative consequence of the free enterprise system?

• There are few incentives for innovation.

• There are few options for consumers.

• Wealth is distributed unequally.

• Information for central planning is limited.

Which of the following economic activities are people free to do under the free enterprise system?

• start their own business

• own a state-operated business

• engage in predatory competition

• not pay taxes