Trade and Currency in the Middle East

Why is voluntary trade always beneficial to the parties engaged in it?

• Because it punishes another country by suspending trade

• Because it increases the price of imports and encourages people to buy domestically made goods

• Because it allows countries to specialize and focus on what they are good at

• Because it allows countries to protect their domestic industries

What is the goal of a tariff?

• To increase the price of an import and encourage people to buy domestically made goods

• To punish another country by suspending trade

• To protect domestic industries

• To limit the amount of a foreign good that can be imported

What is the goal of a quota?

• To punish another country by suspending trade

• To limit the amount of a foreign good that can be imported

• To increase the price of an import and encourage people to buy domestically made goods

• To protect domestic industries

What is the goal of an embargo?

• To increase the price of an import and encourage people to buy domestically made goods

• To punish another country by suspending trade

• To protect domestic industries

• To limit the amount of a foreign good that can be imported

What determines the exchange rate between two countries?

• The political relationship between the two countries

• The economic growth rate of each country

• The amount of goods being traded between the two countries

• The relative supply and demand for each nation's currency

What is human capital?

• The training and skills a worker has to produce a good

• The resources available in a country

• Someone who takes a risk with their own money to start a business

• The durable goods used in the production of goods

How does investment in human capital affect per capita GDP?

• It allows each worker to produce more goods and services

• It protects domestic industries

• It increases the amount of resources available in a country

• It encourages people to buy domestically made goods

What are capital goods?

• The durable goods used in the production of goods

• The training and skills a worker has to produce a good

• The resources available in a country

• Someone who takes a risk with their own money to start a business

How does investment in capital goods affect per capita GDP?

• It increases the amount of resources available in a country

• It protects domestic industries

• It encourages people to buy domestically made goods

• It allows each worker to produce more goods and services

What is entrepreneurship?

• The resources available in a country

• Someone who takes a risk with their own money to start a business

• The training and skills a worker has to produce a good

• The durable goods used in the production of goods