Europe Unit 2 Pre Test

Germany and the United Kingdom invest billions of dollars annually to update factories, maintain infrastructure, and support technological advances. This is an investment in ​ ​ (a)   ​

• human capital
• entrepreneurship
• trade barriers
• capital investment

A capital investment tends to ______ GDP per capita.

• Increase

• Decrease

How do Europe’s natural resources impact the economies of European countries? (Choose 2)

• They reduce the need for capital resources.

• They provide a source of income as exports.

• They reduce opportunities for specialization.

• They provide raw materials for goods and services.

Which statement best completes the cause and effect diagram?

• The United Kingdom has a low GDP per capita

• The United Kingdom has a high GDP per capita.

• The United Kingdom has a low currency exchange rate.

• The United Kingdom has a high currency exchange rate.

European countries have higher taxes and more regulations than the United States and developing countries in Latin America and Asia.

How do these conditions affect entrepreneurs in Europe?

• Entrepreneurs face more obstacles to start businesses, and the process takes longer.

• Entrepreneurs can start businesses more quickly with strong government guidelines.

• Entrepreneurs have more freedom to operate successfully with more government support.

• Entrepreneurs invest more in human capital rather than capital goods to reduce the tax burden.

Which statement describes the primary purpose of the European Union?

• to prevent alliances from forming between member nations

• to protect European nations in the event of another world war

• to work together to strengthen Europe and benefit all member nations

• to share resources and make economic trade easier between coal and steel companies

Countries in the European Union specialize. Why do they specialize?

• To produce goods and services their citizens most want

• To produce goods and services they can produce efficiently

• To produce goods and services that can reduce their imports

What is one result when countries in the European Union specialize?

• They use a currency exchange rate system to track Euros.

• They trade to get other goods and services that they do not produce.

• They create trade barriers to prevent trade with nations outside of the union.

Germany has a literacy rate of 99%. This is high. This tends to ______GDP per capita, which contributes to ________standard of living.

• decrease, higher

• decrease, lower

• increase, higher

• increase, lower

The euro was introduced in 1999.  Select the conditions below that correctly explain trade after the Euro was introduced

• Trade between EU nations that use the Euro requires a system of currency exchange.

• Trade between EU nations and the United States requires a system of currency exchange.

• Trade between EU nations that use the Euro is easier and less costly.

• Trade between European countries that do not use the Euro is less efficient than trade between EU nations that use the Euro.