Latin America: Gov't & Economics Review

What are the 3 BASIC ECONOMIC QUESTIONS asked when studying the economies of the world?

• WHAT should a nation produce?

• WHERE should a nation produce?

• HOW should a nation produce?

• WHO should a nation produce for?

If a country invests more money into their HUMAN CAPITAL, what is most likely to happen with its Gross Domestic Product {GDP}?

• It will be lower.

• It will also be higher.

• It will remain the same.

What is an advantage of SPECIALIZATION?

• A country can produce more goods in less time for less money.

• Businesses can't sell as much variety of products to consumers.

• Workers do not become experts at their tasks/job.

• Countries can' t produce goods as quickly.

An ENTREPRENEUR is a person who takes a risk & starts a business. How can these people help a country's economy/ GDP?

• They write laws to protect citizens.

• They close businesses that are too successful.

• By creating a business, they give people jobs.

• They work to lessen the amount of goods available in an economy.

Why do countries need CURRENCY EXCHANGE in order to trade with other countries?

• To LIMIT trade

• To INCREASE trade {buy & sell goods w/other countries}

• To only use US dollars to trade

• Banks will NOT exchange any currency.

A farmer in Brazil barters goods with other local farmers in order to get what he needs. What type of ECONOMIC SYSTEM would he be using?

• mixed

• command

• market

• traditional

A country is building new factories & updating technology.  What are PRODUCTIVE RESOURCE are these examples of?

• human capital

• capital goods

• natural resources

• entrepreneurship

CUBA’s literacy rate is higher than Mexico & Brazil, yet their GDP per capita is less.  AND their citizens in Cuba earn less. WHY is this?

• The government overtaxes businesses.

• Citizens don't want to work & just go to the beach!

• The government sets workers wages.

• Citizens often take siestas from work.

When a country invests money in healthcare, education & job training for its citizens, which PRODUCTIVE RESOURCE are they choosing to invest in?

• entrepreneurship

• capital goods

• natural resources

• human capital

NAFTA stands for the NORTH AMERICAN FREE TRADE AGREEMENT. It has increased free trade among which three countries?

• MEXICO

• USA

• CANADA

• BRAZIL