Understanding the Global Economy

What is a direct result of globalization on economies around the world?

• Decreased international trade

• Uniform distribution of economic benefits

• Increased self-sufficiency of nations

• Increased interconnectivity and trade opportunities

What does the complementary index indicate in global trade?

• The level of tariffs imposed

• The political relationship between countries

• The compatibility of trade between two countries

• The economic stability of a country

Why do countries engage in international trade?

• To reduce their economic growth

• To increase domestic competition

• To access resources they lack

• To limit their political relationships

What is comparative advantage?

• The ability to produce goods at lower costs than other countries

• A measure of a country's economic size

• The benefit of imposing higher tariffs

• The advantage of having a more skilled workforce

What is the main purpose of implementing tariffs?

• To protect domestic industries

• To increase international trade

• To decrease the cost of imported goods

• To promote global economic equality

What is a goal of neoliberal policies?

• To prioritize domestic production over imports

• To promote free market capitalism

• To increase government intervention in the economy

• To restrict international trade

Which organization aims to promote free trade globally?

• NAFTA

• The International Monetary Fund

• OPEC

• The World Trade Organization

What role does the International Monetary Fund play in the global economy?

• It discourages economic growth and trade

• It restricts the operations of multinational corporations

• It promotes international monetary cooperation

• It imposes tariffs on international trade

What can be a negative consequence of a globally interconnected economy?

• Increased local employment

• Decreased economic inequality

• Global spread of economic crises

• Reduced international trade

How do crises in one part of the world affect the global economy?

• They encourage more international trade

• They improve global economic stability

• They can lead to global economic downturns

• They have no significant impact