SUPPLY AND DEMNAD UNIT 02 ECO

How do fluctuations to the international exchange rate of a nation's currency affect its balance of trade?

• If a country's exchange rate decreases, a negative trade balance occurs for that country.

• If a country's exchange rate increases, the country's balance of trade stays the same.

• If a country's exchange rate decreases, the country's balance of trade stays the same.

• If a country's exchange rate increases, the country can import goods less expensively.

Based on the information in the graph and the table, what is the equilibrium price of pizza?

• $2.00

• $3.00

• $4.00

• $5.00

Which factor can cause a shift on the demand curve?

• improved manufacturing efficiency

• prices of other goods

• government regulation

• investment capital

1. In what system does the government control all of the means of production, including private property, and make all decisions on how resources are to be used?

• capitalism

• communism

• Mercantilism

• socialism

18. Supporters of protectionism would argue that free trade adversely affects which group of people?

• Consumers

• Multi-national corporations

• Shareholders

• Workers

Which scenario is an example of a monopoly?

• A local water company is the sole provider of water for a small town.

• A dry cleaner specializes in environmentally friendly cleaning methods

• A farmer produces green beans for sale at a farmers’ market.

• A small number of cereal companies produce most of the cereal on the market.

Why would the U.S. government seek to limit the development of business monopolies?

• to guarantee low prices

• to increase production levels

• to encourage competition

• to improve hiring practices

In the study of microeconomics, which action would an economist most likely perform?

• analyze pricing strategies of local manufacturing companies

• study a regional trade agreement between developing nations

• review the effect of government payment on the marketplace

• evaluate a national report regarding annual unemployment data

What would be the effect of having several grocery stores in the same area?

• The supply of food would decrease due to demand.

• Prices would decrease as the result of competition.

• The demand of food would increase due to more variety.

• Prices would remain the same initially, then rise.

The late twentieth century has been characterized by an increase in free trade agreements. Advocates of free trade argue that it results in

• increased economic growth

• higher unemployment

• increased immigration

• lower corporate tax rates