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WorksheetsBasics of Economics
Total questions: 17
Worksheet time: 9mins
Name
Class
Date
1.
Which type of economic system is based on customs and beliefs?
a)
traditional economy
b)
mixed economy
c)
command economy
d)
market economy
2.
Who answers all economic questions in a market economy?
a)
religious authorities within individual communities
b)
the government
c)
national legislatures
d)
individual citizens (producers + consumers)
3.
Who makes all economic decisions in a command economy?
a)
individual citizens (producers + consumers)
b)
national legislatures
c)
religious authorities within individual communities
d)
the government
4.
"Country X" has an economic system in which individual citizens and the government share responsibility in answering economic questions. This is an example of a:
a)
traditional economy
b)
market economy
c)
mixed economy
d)
command economy
5.
How does specialization assist the economies of all countries?
a)
It restricts trade between countries.
b)
It motivates countries to migrate closer to command economies.
c)
It encourages trade between countries.
d)
It does not affect trade between countries.
6.
What is a tariff?
a)
a tax placed on imports
b)
the refusal to cooperate with other countries in a specific region
c)
a limit on trade
d)
a limit on imports from other nations
7.
A quota is:
a)
the refusal to cooperate with other countries in a specific region
b)
a limit on imports from other nations
c)
a limit on trade
d)
a tax placed on imports
8.
"Country M" has severely limited its trade with "Country N." Which type of trade barrier does this describe?
a)
a tariff
b)
a quota
c)
a subsidy
d)
an embargo
9.
Which statement best explains the difference between tariffs and quotas?
a)
Tariffs are a ban on trade, whereas quotas lower prices.
b)
Tariffs are a tax added to imports, while quotas are a ban on trade.
c)
Tariffs are a tax added to imports, whereas quotas set limits on imports.
d)
Tariffs set limits on imports, whereas quotas are a tax added to imports.
10.
How does specialization encourage trade between countries?
a)
Countries
cannot specialize in all products, so they trade for what they need and want.
b)
Countries
must specialize in more than fifty percent of the products they produce for
export.
c)
Countries
are allowed to become experts in all products, so they do not need to trade for
goods.
d)
Countries
are allowed to decide what to produce, how to produce, and for whom to produce.
11.
Why is a system of currency exchange necessary for international trade?
a)
Nearly
all world currencies are worthless on the international market.
b)
Those
selling goods on the international market only accept payment in gold and
silver.
c)
Most
goods bought on the international market must be bought using United States
dollars.
d)
There
must be a way to pay for goods purchased from countries with different types of
currencies.
12.
Why is it important to have a system to convert from one currency to another?
a)
The banks are not able to handle different kinds of currencies.
b)
Converting currency makes it possible to buy and sell goods between nations with different types of money.
c)
The conversion to different currencies makes goods cost less.
d)
The dollar is the most valuable currency in the world today.
13.
Which of these must be present for international trade to be successful?
a)
a system for imposing protective tariffs
b)
a system for securing borders
c)
a system for raising taxes
d)
a system for exchanging currencies
14.
What is human capital?
a)
the money spent to educate and train workers
b)
the total agriculture produced by a nation in one year
c)
government-owned businesses
d)
factories and industries
15.
If a country does not invest in its human capital, how can it affect the country’s gross domestic product (GDP)?
a)
Most workers want to keep their jobs and do not care about GDP.
b)
Investment in human capital has little effect on a country’s GDP.
c)
GDP may not increase because poorly trained workers will not be able to do their jobs as well.
d)
GDP is only affected if workers pay for the investment out of their own pockets.
16.
What are capital goods?
a)
the goods and services that are produced for a country’s economy
b)
the factories, machinery, and technology used to make goods
c)
the money spent to train workers to use new technology
d)
the workers who make the goods and services
17.
If a country does invest in capital goods, how can it affect the country's gross domestic product (GDP)?
a)
GDP may increase because the workers are able to more efficiently produce goods.
b)
Investment in capital goods has little effect on a country’s GDP.
c)
GDP is only affected if workers pay for the investment out of their own pockets.
d)
Most workers want to keep their jobs and do not care about GDP.
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