NEW
Font size
WorksheetsChapter 3 – Global Economy Practice Test
Total questions: 44
Worksheet time: 22mins
Domestic business refers to:
Trade across national borders
Business activities within one country
Selling goods online
Importing from developing countries
Which of the following would NOT be affected by foreign trade?
Cost of consumer goods
Availability of products
Local community events
Variety of goods in stores
If a country exports more than it imports, it has:
A trade deficit
A trade surplus
An embargo
A quota
The value of one nation’s currency compared to another’s is called:
Interest rate
Inflation rate
Exchange rate
Balance of trade
A country with an agriculture-based economy usually has:
A high standard of living
Limited high-quality goods for citizens
An advanced infrastructure
Strong international banks
Which of the following can act as an informal trade barrier?
Quotas
Tariffs
Culture and religion
Free-trade agreements
Which organization’s goal includes eliminating import quotas?
IMF
WTO
Which situation represents absolute advantage?
Saudi Arabia in fresh fish
Honduras in bananas
Canada in rice
Norway in citrus fruit
The amount a country owes to other countries is called:
Balance of payments
Foreign debt
Trade deficit
National budget
What might cause the dollar’s value to rise?
Increased U.S. trade deficit
Lower U.S. inflation
Low U.S. interest rates
High agricultural dependency
Studying another nation’s customs, traditions, and values refers to:
Geography
Economic development
Cultural influences
Political concerns
Infrastructure includes:
Court systems
Roads, power, and communications
Education systems
Cultural traditions
Which discourages international trade?
Free-trade zone
Common market
Embargo
Free-trade agreement
Which is an example of a global strategy?
Adjusting menus for local tastes
Using the same Coca-Cola formula worldwide
Changing advertising to respect religion
Local government tariffs
An agreement between two companies to share a project is a:
Franchise
Proprietorship
Joint venture
License
Which group helps stabilize exchange rates worldwide?
WTO
IMF
World Bank
EU
Completely prohibiting imports or exports of a product is called:
Quota
Tariff
Embargo
Deficit
Items bought from other countries are called:
Exports
Imports
Surplus
Balance of trade
The cost of using someone else’s money is called:
Exchange rate
Quota
Tariff
Interest rate
Multinational companies sometimes have influence over:
Currency values
Political power
Balance of payments
Farming production
Without foreign trade, many products would be unavailable or more expensive.
True
False
A quota is a tax on imported goods.
True
False
Comparative advantage exists when a country is relatively more efficient in producing something.
True
False
Multinational companies never affect politics.
True
False
The balance of trade is the difference between exports and imports.
True
False
Infrastructure includes a nation’s transportation and utility systems.
True
False
Cultural differences can discourage trade.
True
False
The IMF’s main role is providing emergency loans and exchange rate stability.
True
False
An embargo encourages free trade.
True
False
A trade deficit occurs when imports exceed exports.
True
False
The difference between total exports and total imports is called _________.
balance of trade
gross domestic product
per capita income
inflation rate
The difference between money flowing into and out of a country is _________
balance of payments
gross domestic product
exchange rate
budget deficit
Literacy level, technology, and _________ affect economic development.
infrastructure
climate
language
population
A _________ company does business in several countries.
multinational
domestic
local
regional
Duties and trade barriers are reduced in a _________.
free trade agreement
customs union
tariff zone
protectionist policy
The _________ provides loans for rebuilding and development projects.
World Bank
International Monetary Fund
World Trade Organization
United Nations
The _________ encourages cooperation in settling trade disputes.
World Trade Organization (WTO)
International Monetary Fund (IMF)
United Nations (UN)
World Health Organization (WHO)
A _________ occurs when a country imports more than it exports.
trade deficit
trade surplus
balanced budget
currency appreciation
A _________ occurs when a country exports more than it imports.
trade surplus
trade deficit
inflation
recession
An _________ is paid for using someone else’s money.
interest
deposit
salary
bonus
Absolute advantage and comparative advantage are different concepts in economics. Which statement correctly explains the difference between them and provides an example?
Absolute advantage refers to the ability to produce more of a good with the same resources, while comparative advantage refers to producing a good at a lower opportunity cost. For example, if Country A can produce more wheat than Country B, it has an absolute advantage; if Country B gives up less corn to produce wheat, it has a comparative advantage.
Absolute advantage and comparative advantage both mean producing more goods than another country, for example, if Country A produces more wheat and corn than Country B, it has both advantages.
Absolute advantage is about producing goods at a lower opportunity cost, while comparative advantage is about producing more goods with the same resources. For example, if Country A produces more wheat, it has a comparative advantage.
Absolute advantage and comparative advantage are the same, both referring to the ability to produce goods more efficiently than others.
Cultural factors such as traditions and religion can act as barriers to international trade by:
Restricting the types of goods that can be imported or exported due to religious or traditional beliefs.
Encouraging free trade between all countries regardless of cultural differences.
Eliminating tariffs and trade restrictions globally.
Promoting uniform consumer preferences worldwide.
The roles of the IMF, World Bank, and WTO in international business can be described as:
IMF provides financial stability, World Bank funds development, WTO regulates trade rules.
IMF regulates trade, World Bank provides loans for trade, WTO funds development projects.
IMF funds infrastructure, World Bank manages exchange rates, WTO provides financial aid.
IMF sets tariffs, World Bank enforces trade agreements, WTO provides development loans.
Multinational corporations can have which of the following types of impacts on host countries?
Both positive and negative impacts
Only positive impacts
Only negative impacts
No significant impact
