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WorksheetsUnit 4 Common Assessment Test Review
Total questions: 115
Worksheet time: 2hrs 38mins
What Is Free Trade
International trade left to its natural course with tariffs, quotas, embargoes, subsidies, and other restrictions.
Trade that protects: national security, domestic employment, and the environment in developing countries.
International trade left to its natural course without tariffs, quotas, or other restrictions.
Economic sanctions applied by one or more countries against a targeted country, group, or individual.
Is NAFTA a trade agreement or a trade barrier?
A Trade Agreement
A Trade Barrier
What does it mean to protect infant industries?
To make sure that well established corporations get a chance in the market.
To make sure that new industries get a chance to compete in the market both nationally and internationally.
To make sure that the national security of the USA is protected.
To make sure that the environment of the USA is protected from development in perpetuity.
What does it mean to protect national security?
The argument supports the use of trade barriers when a new industry is in the early stages of development.
The argument of maintaining industries critical to the country’s even when the industry cannot efficiently compete at the internationally.
The argument of seeking to protect workers of a country from becoming unemployed due to competition from workers in developing countries.
The argument that restrictions on trade with countries that have lax environmental standards.
What Does It Mean To Protect Domestic Employment?
The argument supports restrictions on trade with countries that have lax environmental standards.
The argument seeking to protect workers of a country from becoming unemployed due to competition from workers in developing countries.
The argument that supports the use of trade barriers when a new industry is in the early stages of development.
The argument for maintaining industries critical to the country’s national security even when the industry cannot efficiently compete
Which of these is not an international trade agreement/ organization?
European Union
North American Free Trade Agreement
Association of Southeast Asian Nations
Southern Christian Leadership Conference
If two nations trade and increase their productivity, what will happen to both countries standard of living?
It will decrease
It will increase
It will remain unchanged
The goal of NAFTA was to create a "__________" between the United States, Canada, and Mexico.
borderless country
military alliance
political union
free trade zone
What does "F" & "T" stand for in "NAFTA"?
Federated Trade
Future Trade
Fiscal Trade
Free Trade
What does "F" & "T" stand for in "NAFTA"?
Federated Trade
Future Trade
Fiscal Trade
Free Trade
Taxes imposes on imports are called
Subsideis
Tariffs
Embargoes
Standards
How would someone who wanted to see all trade barriers removed have felt about NAFTA?
They would have opposed it on the grounds that it would cost too many US jobs
They would have supported it because it called for subsidies
They would have opposed it on the grounds that it made tariffs too high
They would have supported it for establishing free trade
The international community has just discovered that the leaders of Country X are executing large numbers of citizens who it accuses of opposing the government. In an effort to put economic pressure on Country X to stop these mass murders, the international community refuses to ship food and military weapons to the country, while refusing to buy Country X's products. As a result, Country X ceases its brutal actions and asks other nations to resume trade relations. Country X has responded to
Tariffs
An embargo
International STandards
International Subsidies
Which of the following can limit the availability of foreign products?
Product standards
Fee trade
Lack of quotas
Few domestic subsidies
A tariff is when a _______ is put on an imported good
Tax
Limit
Block
Cost of trade
A block or restriction on trade with another country is called
Tariff
Embargo
Quota
Subsidies
A country might place a limit or __________ on another country to weaken their economy.
Embargo
Tariff
Quota
Standard
What does EU stand for?
Everyone United
European Union
Equal United
European University
Countries included in the EU
France, Germany, Italy, and France
Great Britain, United States, Japan
Brazil, Great Britain, United States, Cuba
DRC, Zimbabwe, Cuba
What does NAFTA mean?
North American Federation of Team Athletes
North American Federation of Trade
New Americans Feel Threatened by Allies
North American Free Trade Agreement
What is ASEAN?
Association of South East Asian Nations
Association of Social Studies Educators in Nigeria
Association of Scientist, Educators, and New Reporters
Association of Safety Engineers, Accountants, and Nuclear Engineers
What countries are included in ASEAN?
China, Japan, Russia, and South Korea
Ireland, France, Spain, and Israel
Thailand, Indonesia, Vietnam, Cambodia, and Malaysia
Brazil, Cuba, Jamaica, and Aruba
What is the purpose of NAFTA
To create an intercontinental road between Mexico, USA, & Canada
To decrease trade barriers and increase trade among Canada, USA, & Mexico.
To make sure that Americans can get Canada maple syrup and Mexican tacos.
To make sure that people in Canada and Mexico can go to Walmart.
The United States can produce 10 computers per hour or 20 drills per hour. Germany can produce 2 computers per hour or 10 drills per hour. Using this data, determine which of the statements is correct.
Germany has an absolute advantage in both drill and computer production.
The U.S. has an absolute advantage in both drill and computer production.
Germany has an absolute advantage in both drill and computer production.
The U.S. has an absolute advantage in drill production and Germany has an absolute advantage in computer production.
As nations learn to specialize in production, they will trade with other nations when what happens?
They have absolute advantage in trade.
They have comparative advantage in trade.
They will not trade with another country.
When they lose their advantage in that area of trade.
Suppose that in France, 40 labor hours are required to produce a liter of wine. In Italy, 30 labor hours are required to produce a liter of wine. These figures indicate that
Italy has an absolute advantage in wine production.
France has an absolute advantage in wine production.
Italy has a comparative advantage in wine production.
France has a comparative advantage in wine production.
If the United States imports $100 million of goods and exports $150 million, what does the United States have?
a trade deficit
a trade surplus
a budget deficit
a budget surplus
Pat decides to purchase a Hyundai from South Korea instead of the U.S.-produced Ford because of the vehicle's lower price. This illustrates the
absolute advantage of the U.S. in producing Ford vehicles.
absolute advantage of South Korea in producing Ford vehicles.
comparative advantage of the U.S. in producing Hyundai vehicles.
absolute advantage of South Korea in producing Hyundai vehicles.
Which statement describes an advantage of increased global trade and competition on the U.S. economy?
The variety of goods and services available decreases over time.
Consumers have to pay higher prices for a limited number of goods.
The United States can focus on producing goods than it can make more efficiently than other countries.
The United States can economically profit from tariffs and quotas designed to protect infant industries.
The purpose of the founding of the European Union (EU) in 1993 was to
prevent the poor from causing a revolution.
fight the growing global network of terrorism.
become an economic power to compete with the United States.
guarantee the freedom of movement of people, goods, services, and capital.
Established in 1967 in Thailand with more than 500 million members, one of the largest regional markets in the world is
ASEAN
NAFTA
NATO
OPEC
Canada is located to the north of the United States. Due to its shared border, the US and Canada, along with Mexico, entered into a trade agreement known as
the European Union
the United Nations
the World Trade Organization
the North American Free Trade Agreement
Tariffs, quotas, and subsidies are examples of
free trade
trade barriers
trade incentives
restrictive licenses
A tariff is a form of taxation on foreign products, while a quota is a ______ on imports from foreign countries.
boost
increase
limit
rise
The nation of Tupalow is outraged that the Republic of Za has repeatedly violated international human rights. As a result, Tupalow has decided not to export goods or import goods from Za. What is such an action called?
tariff
embargo
trade treaty
unfavorable balance of trade
"Protectionist" trade policies are designed to
increase imports.
protect domestic industry.
reduce tariffs on foreign products.
increase government transfer payments.
What are tariffs?
Political boundaries between nations.
Military blockades of specific countries.
Disputes between state governments over boundaries.
Taxes on the import or export of goods from a country.
Tariffs and import duties will protect American businesses from unfair competition by countries like China and Japan. This sounds MOST like an argument against
free trade
import quotas
market economics
unbridled competition
Which statement BEST explains why a tariff is considered a trade restriction?
Manufacturers use tariffs to determine the number of laborers needed for production.
The government uses tariffs to limit the number of imports that can enter a country.
Tariffs allow nations to specialize and focus on producing goods at a cheaper cost.
Tariffs result in higher priced imported goods and lower priced domestic goods.
Supporters of NAFTA and free trade would contend that such agreements
increase government control of a nation's economy.
limit the growth of an economy and prevents inflation.
hamper democratic reforms and open markets in areas that are already strong.
stimulate democratic reform and open markets in areas in need of improvement.
The price of one nation's currency in terms of another nation's currency is called
Exchange rate
Fiscal policy
Monetary policy
Discount rate
$1 = 10.34 pesos. Shelby traveled to Mexico to a resort and took $100 in currency. When she exchanged into pesos, she received:
1034 pesos
900 pesos
103 pesos
10.3 pesos
When the dollar "falls" compared to other countries, which group benefits the most?
Those who export products overseas.
Those who import products overseas.
Those who have large cash savings on hand.
Those who speculate and trade in currencies.
An exchange rate is used to
determine the price of one country's currency in terms of another country's currency.
promote the argument supporting free trade.
promote the use of subsidies on foreign goods.
determine the price of one country's imports in terms of another country's imports.
Travis takes two trips to Ecuador. On his first trip, he finds that one U.S. dollar is worth 25,000 Ecuadorian Sucre. On his return trip, he finds that the dollar is now worth 26,000 Ecuadorian Sucre. What is a LIKELY result of this change in exchange rates?
American imports to Ecuador increase.
American exports to Ecuador increase.
There is not enough information to answer.
Ecuadorians invest more in infrastructure.
1 U.S. Dollar = 0.50 Euro. 1 Mexican Peso = 0.10 U.S. Dollar. In this situation, you can conlcude that 1 Euro would be traded for
20 Mexican pesos
10 Mexican pesos
5 Mexican pesos
1 Mexican peso
If the demand for British pounds increases,
The dollar price of the British pound will increase.
The dollar price of the British pound will decrease.
The trade balance between the two nations will be out of equilibrium.
The exchange rate between dollars and pounds will be out of equilibrium.
An increase in Mexico's demand for United States' goods would cause the value of the dollar to
Depreciate because the United States would be buying more Mexican pesos.
Appreciate because Mexico would be selling more United States dollars.
Appreciate because the price level in the United States would increase.
Appreciate because Mexico would be purchasing more United States dollars.
When the dollar "rises" compared to other currencies, this means
it takes fewer dollars to equal a unit of foreign currency.
it takes more dollar to equal a unit of foreign currency.
the value of a unit of foreign currency is harder to measure in dollars.
the value of a dollar is harder to measure, compared to foreign currencies.
Mexico is experiencing high inflation while Canada is enjoying a steady GDP and stable inflation. What should happen in the foreign exchange market?
a depreciation of Mexico's currency.
a decrease in the supply of Mexico's currency.
a decrease in the demand for Canada's currency.
An increase in the supply for Canada's currency.
When the value of the British pound changes from $1.25 to $1.50, then
the Pound has appreciated and the Dollar has depreciated.
the Pound has appreciated and the Dollar has appreciated.
the Pound has depreciated and the dollar has appreciated.
the Pound has depreciated and the dollar has depreciated.
If the dollar _______ from 1.0 European Euros per dollar to 0.9 Euros per dollar, the Euro ________ from 1.0 dollar to 1.1 dollar per Euro.
depreciates; appreciates.
depreciates; depreciates.
appreciates; appreciates.
appreciates; depreciates.
How is an exchange rate determined in the money market?
the forces of supply and demand
whatever sellers of goods are willing to take
government/ the Federal Reserve Bank
investors decide the value of the currency they wish to invest
If a U.S. citizen could buy 25,000 Pounds for $100,000, the exchange rate for the Pound would be
$0.25 per Pound
$1 per Pound
$4 per Pound
$25 per Pound
Although it lost most of its value during and after WWII, the currency of Japan is now one of the most strongest in the world. Japan's currency is called the
yen
riel
won
rupee
In April 2000, one U.S. Dollar traded on the foreign exchange market for about 7.2 Mexican pesos. Therefore, one Mexican pesos would have purchased about
0.14 U.S. Dollars.
4.10 U.S. Dollars.
1.40 U.S. Dollars.
0.41 U.S. Dollars.
When a country's currency appreciates, the country's goods abroad become ________ expensive and foreign goods in the country become __________ expensive.
more; less.
more; more.
less; less.
less; more.
When the exchange rate for the Mexican peso changes from 9 pesos to the dollar to 10 pesos to the dollar, then
the peso has depreciated and the dollar has appreciated.
the peso has appreciated and the dollar has appreciated.
the peso has appreciated and the dollar has depreciated.
the peso has depreciated and the dollar has depreciated.
What is a decrease in the value of a currency?
appreciation
depreciation
exchange rate
inflation
What is the value of a nations currency in relation to a foreign country?
Trade Deficit
Foreign Exchange Market
Exchange Rate
Trade Surplus
Whats the relationship between the value of a country's exports and the value of its imports?
Trade Surplus
Balance of Trade
Trade Deficit
Appreciation
Depreciation
What is the increase in the value of a currency?
Exchange Rate
Recession
Absolute Advantage
Appreciation
What does it mean when an economist says a currency is stronger?
It can be exchanged for more of a lesser foreign currency
It can be converted to prices in any currency
There are few things it could buy
It will buy fewer foreign goods
What is the result of a nation importing more than it exports?
Trade Surplus
Free Trade Zone
Trade Deficit
Trade Barrier
The exchange rate between 2 countries is determined by,
Supply and Demand
Inflation/Interest Rates
Balance Trade
Fixed Percentage
What is an exchange rate?
The rate at which goods are exchanged between two countries
The price of one nation's currency in terms of another's
How many US dollars you can exchange for RMB at Travelex
The price of goods in terms of a foreign currency
According to the table, what is the Euro equivalent of 1 USD?
1.32 Euros
0.53 Euros
.76 Euros
1.59 Euros
According to the table, what is the USD equivalent of 1 Australian?
0.97 USD
1.32 USD
1.28 USD
1.03 USD
Why do changing exchange rates help one country and hurt the other?
One side loses purchasing power and the other gains it
Takes money away from one side and gives it to the other
Causes war between the two countries
One country's government introduces tariffs to protect local industries
If the US $ were to appreciate in relation to the Euro, what effect would this have?
European consumers would have more purchasing power in US
US consumers can buy more European goods and services for fewer $$
US consumers can buy more English goods and services for fewer $$
European tourists to the US will spend more $$
How does inflation rate affect currency value/exchange rate?
Higher inflation leads to depreciating currency & vice versa
Increasing inflation leads to more favourable exchange rates
Higher inflation leads to currency appreciation
Lower inflation leads to more favourable exchange rate
If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?
Mexico has less purchasing power in Chinese currency
Mexico benefits from increased purchasing power
Mexico would have more Chinese investors
They would be invaded by China
What is the result of a nation exporting more than they import?
Trade Deficit
Trade Surplus
Balance of Trade
Trade War
What is the result of a nation importing more than it exports?
Trade Surplus
Free Trade Zone
Trade Deficit
Trade Barrier
Each row shows the equivalence of that country's currency compared to another. For example, 1 Euro would get you 1.2829 Australian Dollars or 0.8299 British Pounds.
According to the table, what is the Euro equivalent of 1USD?
1.32 Euros
0.53 Euros
.76 Euros
1.59 Euros
Where is the Yen used?
India
China
Japan
USA
If one US dollar equals .5 British Pounds, you would receive ___ British Pounds if you exchanged $15.
1.5
7.5
5
15
If one Canadian Dollar is worth 1.06 US dollars, you would receive ___ US dollars if you traded 100 Canadian dollars.
100
106
160
150
What does appreciate mean?
to decrease in value
to increase in value
to remain the same in value
What does it mean to depreciate in value?
to gain in value
to remain the same in value
to fall in value
to gain value by 100 fold
The price of one country's currency against another is known as the __________.
Mortgage rate
Treasury bond rate
Stock Rate
Exchange Rate
The paper money and coins - sometimes called "cash" - that make up the money supply of a nation.
Balance of trade
Currency
Trade deficit
Opportunity cost
What is the most common economic system in the world today?
market economy
mixed economy
command economy
traditional economy
What is a tariff?
a refusal to buy goods from another country
a limit on the number of imports
a tax on imports
a refusal to sell to another country
What is a quota?
a limit on the number of imports
a tax on imports
a refusal to buy goods from another country
a refusal to sell to another country
What is an embargo?
a refusal to buy goods from another country
a tax on imports
a limit on imports
a refusal to sell to another country
What is the purpose of a trade barrier?
to raise prices in another country
to make money from another country
to restrict trade with another country and boost domestic production
to make another country do something illegal
Which is an example of a quota?
The U.S. stops trade with China.
The U.S. limits the amount of foreign cars brought into our country.
The U.S. pays a high tax on BMW cars brought into the country.
Which is an example of a trade barrier?
Japan is allowed to send as many electronic products to the U.S. as they want.
The U.S. freely trades with other countries with no restrictions.
A high tax is placed on all diamonds received from Africa.
The price of one nation’s currency in terms of another nation’s currency
tariff
embargo
quota
exchange rate
Russia is best at producing and trading oil; Germany exports cars. What is this concept called?
Specialization
Tariff
Embargo
Quota
Russian government found deadly chemicals in German hamburgers. What will keep Russians safest?
An embargo against German hamburger meat producers
A tariff on German hamburgers
A quota on German hamburgers
Free trade with German hamburger producers
You are on a trip to Germany. You swap your dollars for Euros. Why exchange currency?
To buy or sell goods in Germany; they won't take dollars.
Because dollars are worth the same as other currency
Because Euros are a great souvenir.
This trade barrier is used in hopes of getting the attention of a harsh/dangerous government to make a change
tariff
quota
embargo
Which statement best explains why nations must trade?
All nations belong to free trade agreements.
All nations seek out new production methods.
No nation has all necessary resources.
No nation can employ all of its laborers.
Countries will export goods and services that they can produce at lower costs. This is called —
oligarchy
monopoly
comparative advantage
capitalism
The exchange is S$1 = RM2.50. How much will I receive if i want to change RM2000 to S$.
2000
320
800
128
The exchange is S$1 = RM2.50. How much will I receive if i want to change S$800 to RM.
2000
320
800
128
The exchange is S$1 = RM2.50. How much will I receive if i want to change RM320 to S$.
2000
320
800
128
The exchange is RM1 to S$0.40. How much will I receive if i want to change S$800 to RM.
2000
800
320
128
The exchange is RM1 to S$0.40. How much will I receive if i want to change S$320 to RM.
2000
800
320
128
