Global Economy Test

What does the term "global economy" mean?

• Each country works completely alone.

• National economies are linked through the exchange of goods, services, money, technology, and labor.

• Countries only trade with their immediate neighbors.

• The world uses one single currency.

Which of the following is an example of how the global economy affects daily life?

• Eating food grown only in your local area.

• Using a phone made in one country with parts from others.

• Only buying clothes made in your own country.

• Never using the internet for shopping.

What is the primary goal of free trade agreements (FTAs) like the USMCA (formerly NAFTA) and the European Union (EU)?

• To increase taxes on imported goods.

• To make it harder for goods and services to cross borders.

• To lower or remove taxes and other trade barriers between countries.

• To encourage countries to be self-sufficient.

What is meant by "global value chains (GVCs)"?

• All parts of a product are made in the same country.

• Companies only sell their products in their home country.

• Different stages of making products happen in different places based on cost or expertise.

• Countries refuse to share technology with each other.

How has the internet and digital technology affected economic borders?

• They have made borders stronger and harder to cross.

• They have made geography less important for certain economic activities, making borders almost invisible.

• They have stopped international online shopping.

• They have had no impact on economic borders.

What is the foreign exchange market (Forex)?

• A place where physical goods are traded internationally.

• The largest financial market in the world, where currencies are bought and sold.

• An agreement between countries to use the same money.

• A local market for exchanging old coins.

Which international organization helps promote international cooperation and financial safety?

• The World Trade Organization (WTO)

• The United Nations (UN)

• The International Monetary Fund (IMF)

• The World Bank

What is a potential downside of the interconnectedness of the global economy?

• It always leads to lower prices for consumers.

• Economic problems in one country can quickly affect others.

• It reduces cultural exchange.

• It makes it harder for companies to find skilled workers.

Which of the following is mentioned as a major challenge facing the global economy?

• Too much equality between countries.

• Lack of technological advancement.

• Inequality, both within and between countries.

• Decreased environmental concerns.

According to the text, what is one trend to watch for the future of the global economy?

• The decline of digitalization.

• Decreased importance of emerging markets.

• The continued rise of digitalization.

• A complete stop to regional trade partnerships.