Economic Effects Quiz

Which of the following is a likely economic effect of a trade war between two major economies?

• Increase in global trade

• Decrease in domestic unemployment

• Increase in consumer prices

• Increase in government spending

If a country imposes tariffs on foreign goods, how might this impact the domestic economy?

• It may lead to lower consumer prices.

• It could increase demand for domestically-produced goods.

• It might decrease government revenue.

• It would always reduce inflation.

An international oil embargo would most likely lead to:

• A decrease in the cost of transportation

• An increase in the cost of goods that rely on oil

• A surplus of oil in the embargoing countries

• Stable prices in oil-dependent industries

Which economic measure would a country likely take in response to high levels of inflation due to a global crisis?

• Raise interest rates

• Lower tariffs

• Decrease currency value

• Increase import quotas

The depreciation of the Canadian dollar due to an international crisis would likely:

• Decrease exports

• Increase exports

• Decrease foreign investments in Canada

• Lead to lower interest rates

How does an increase in global commodity prices impact an importing country?

• Decreases the cost of living

• Leads to a trade surplus

• Increases inflationary pressures

• Lowers the value of its currency

What is a potential effect of a severe global recession on the Canadian economy?

• Increased exports

• Decreased unemployment

• Reduced consumer spending

• Increased stock market growth

If another country implements protectionist policies, how might this affect Canadian exporters?

• Increase access to foreign markets

• Reduce sales due to restricted access

• Decrease production costs

• Increase demand in the local market

How can political instability in a trading partner country affect Canada?

• Increased market confidence

• Reduced demand for Canadian imports

• Increased trade opportunities

• Lower consumer prices in Canada

How might a sudden increase in global interest rates impact the Canadian economy?

• Reduced costs for Canadian exporters

• Decreased value of the Canadian dollar

• Higher borrowing costs for Canadian consumers

• Increased consumer spending