1/10/2019 Test: Chapter 2 - The Global Economy | Quizlet

NAME

10 Written questions

1. Financial assistance of any sort including: cash payments, low interest loans, tax breaks, export credits and export
0
guarantees, export promotion agencies, free trade and export processing zones, all distort trade in favour of domestic
producers

INCORRECT

No answer given
THE ANSWER

Subsidies

2. The current rate or price

INCORRECT

No answer given
THE ANSWER

spot rate

3. When the exchange rate of a currency is fixed against others—in reality, a completely fixed rate is difficult to achieve

INCORRECT

No answer given
THE ANSWER

fixed exchange rate

4. A tax levied by countries on imports or exports

INCORRECT

No answer given
THE ANSWER

tariff

5. -4 largest economies are Egypt, Morocco, South Africa, and Tunisia (have been diversified)
-oil exporters are Angola, Equatorial Guinea, Chad, Libya, and Nigeria; the richest but least diversified and need to invest in
infrastructure and education
-poorest countries are Republic of the Congo, Ethiopia, Mali, and Sierra Leone in pre-transition stage

INCORRECT

No answer given
THE ANSWER

Africa's economies

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1/10/2019 Test: Chapter 2 - The Global Economy | Quizlet

6. -manufactured goods
-mining
-agricultural products

INCORRECT

No answer given
THE ANSWER

Merchandise trade

7. says nothing about the distribution of wealth within the economy

-India's GDP is 5x Australia's, but Aus.'s per capita income is US$44,345 which is 10x India's US$4,306

INCORRECT

No answer given
THE ANSWER

Problem with measuring standard of living with GDP

8. An economy where prices and output are determined by the decisions of consumers and
private firms interacting through markets

INCORRECT

No answer given
THE ANSWER

Market economy

9. explains that countries will produce and export products that utilize resources which they have in abundance, and import
products which utilize resources that are relatively scarce
Ex. China and India export goods which take advantage of cheap labour/Western Europe concentrates on capital intensive
industries like the chemical industry

INCORRECT

No answer given
THE ANSWER

Factor proportions theory (Factor endowment theory)

10. Government policies to encourage exports, discourage imports, and control outflows of
money with the aim of building up reserves of foreign exchange

INCORRECT

No answer given
THE ANSWER

neo-mercantilism

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