SW Asia Economics Practice Test (SS7E4a-c, SS7E5a-d, SS7E6d)

Which of the following nations focuses on the production of petroleum and petroleum based products?

• Israel

• Turkey

• Saudi Arabia

• Israel and Turkey

Answer explanation

Saudi Arabia is a leading nation in petroleum production, known for its vast oil reserves and significant role in the global oil market, unlike Israel and Turkey, which do not focus primarily on petroleum production.

What is the purpose of an embargo?

• To increase trade relations

• To decrease trade relations

• To promote domestic industries

• To increase the import of goods

Answer explanation

An embargo is a government order that restricts trade with specific countries, aiming to decrease trade relations. This is often used as a political tool to exert pressure or influence.

The nation of Turkey has an economy that has moved from one with strong government controls to one where individuals make most of the economic decisions.  Where does this policy place Turkey on a continuum between market and command?

•  more command than market

•  more market than command

•  neither command nor market

•  both command and market

Answer explanation

Turkey's economy has shifted towards individual decision-making, indicating a move towards a market economy. Therefore, it is more market than command, reflecting less government control and more economic freedom.

 What is the primary function of OPEC?

• to control which nations are allowed to produce oil

• to control the amount of oil each nation is allowed to purchase

• to control the global price of oil by controlling the supply

• to control the amount of oil each nation is allowed to export

Answer explanation

OPEC's primary function is to control the global supply and price of oil. By managing production levels among member countries, OPEC aims to influence oil prices in the market, making this the correct choice.

The nation of Saudi Arabia has an oil based economy with strong government controls over key economic activities.  In the past twenty years, the Saudi government has encouraged the development of private business, but government restrictions have limited this from happening. Where does this place Saudi Arabia on a continuum between market and command?

•  more command than market

•  more market than command

•  neither command nor market

•  both command and market

Answer explanation

Saudi Arabia's economy is primarily oil-based with strong government controls, indicating a command economy. Although there are efforts to develop private business, government restrictions limit market activities, placing it more towards command.

Which of the following is a characteristic of a mixed economy?

• Only government makes all the economic decisions

• Only private businesses make all the economic decisions

• Both government and private businesses make economic decisions

• Neither government nor private businesses make economic decisions

Answer explanation

A mixed economy combines elements of both government and private enterprise in making economic decisions, allowing for a balance between regulation and free market principles.

Which of the following describes how many nations of SW Asia have been affected by the distribution of oil?

• many nations have become very wealthy

• many nations economies have not been affected

• the populations of many urban areas have increased

• many nations have become very wealthy and populations of many urban areas have increased

Answer explanation

The correct choice highlights that many nations in SW Asia have become wealthy due to oil distribution, which has also led to increased urban populations as people migrate for jobs and opportunities in these prosperous areas.

Oil accounts for over 90% of all Saudi Arabian exports. This indicates that the Saudi Arabian economy has a high level of _________ .

• entrepreneurship

• investment in capital goods

• specialization

• investment in human capital

Answer explanation

The high percentage of oil in exports indicates that Saudi Arabia has specialized its economy in oil production, focusing resources and efforts on this sector rather than diversifying into multiple industries.

What is the primary function of OPEC?

• to control which nations are allowed to produce oil for world markets

• to control the amount of oil each nation is allowed to purchase

• to control the global supply of oil in order to control the price on world markets

• to control the number of nations who are allowed to produce oil for world markets

Answer explanation

OPEC's primary function is to control the global supply of oil, which allows it to influence prices in world markets. This is essential for stabilizing oil prices and ensuring a steady income for member countries.

In which region of SW Asia are most oil deposits located?

• around the Red Sea

• along the Jordan River

• around the Persian Gulf

• in the deserts of Iraq and Syria

Answer explanation

Most oil deposits in SW Asia are found around the Persian Gulf, which is home to some of the largest oil reserves in the world, unlike the other regions mentioned.