Global Economy Midterm

25 Questions | Total Attempts: 36

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Global Economy Quizzes & Trivia

—What are the four skill sets economists predict will be most valuable in the future global economy? —ble T — —Why do nations trade? — —What is scarcity? — —What is the law of supply and demand?


Questions and Answers
  • 1. 
    Most trading on exchange rate markets is related to _______________ and ______________.
    • A. 

      International exchange and management of the risks of possible future changes in exchange rates.

    • B. 

      International investments and management of the opportunities available with possible future changes in exchange rates.

    • C. 

      Domestic investments and management of the risks of possible future changes in exchange rates.

    • D. 

      International investments and management of the risks of possible future changes in exchange rates.

  • 2. 
    The 3 Factors are New Global ___________, National ____________ to Globalization, and Changes in _________.1.2.3.
  • 3. 
    A high inflation rate means that your currency buys less.
    • A. 

      True

    • B. 

      False

  • 4. 
    There are two main ways to deal with floating exchange rate risks. What are they? (Select two)
    • A. 

      Limit the number of transactions you do that involve long term commitments that would reduce the risks to some extent

    • B. 

      Increase the number of transactions you do that involve long term commitments that would reduce the risks to some extent

    • C. 

      Use financial contracts that would hedge some of the risks with floating exchange rates

    • D. 

      Use fixed exchange rates that would hedge some of the risks with floating exchange rates

  • 5. 
    The overwhelming majority of trades in 2007 were the exchange of Euro's. 
    • A. 

      True

    • B. 

      False

  • 6. 
    What is the main difference(s) between microeconomics and macroeconomics?
  • 7. 
    Please define 2 economic indicators.
  • 8. 
    GATT stands for ____________________.
    • A. 

      General Agreement on Tariffs and Tencent

    • B. 

      General Arithmetic on Tariffs and Trade

    • C. 

      General Agreement on Tariffs and Trade

    • D. 

      General Agreement on Terrible Trades

  • 9. 
    All of the following are skills sets economists predict will be most valuable in the future global economy except?
    • A. 

      Sales

    • B. 

      Bureaucratic

    • C. 

      Investment

    • D. 

      Service

    • E. 

      Computer

  • 10. 
    Please give an example of the law of supply and demand.
  • 11. 
    __________ is the problem of infinite human needs and wants, in a world of finite resources.
  • 12. 
    Many countries in the late 1940s realized that the reductions in world trade in wartime and during the Depression had hurt their economies
    • A. 

      True

    • B. 

      False

  • 13. 
    An example of a change that significantly reduced the cost of transportation of goods is_______________.
    • A. 

      Health Regulations

    • B. 

      Barriers to trade

    • C. 

      Guns

    • D. 

      Containerization

  • 14. 
    The countries of the world could not and did not want to drop the trade barrier’s of the 1930’s that pushed countries apart such as heavy tariffs.
    • A. 

      True

    • B. 

      False

  • 15. 
    All of the following are examples of the effects of globalization except
    • A. 

      A department store put's items on lay away

    • B. 

      A McDonald's open up in India

    • C. 

      An American fashion designer uses cultural ideas from Chinese pop to make clothes

    • D. 

      It is less costly to ship goods from China than to make them in Europe

  • 16. 
    The US and other major currencies of the world use _______ exchange rates.
    • A. 

      Fixed

    • B. 

      Soft-Pegged

    • C. 

      Self Regulated

    • D. 

      Floating

  • 17. 
    A strong currency means you can __________________________________.
    • A. 

      Buy less imports so imports decrease but the foreign currency that exporters earn is worth more so exports tend to rise.

    • B. 

      Buy more imports so imports rise but the foreign currency that exporters earn is worthless so exports tend to fall.

    • C. 

      Buy less imports so imports fall but the foreign currency that exporters earn is worthless so exports tend to fall.

    • D. 

      Buy more imports so imports rise but the foreign currency that exporters earn is worth more so exports tend to rise.

  • 18. 
    A common issue with China in the first decade of the 21st century is that china has fixed its exchange rate at a fairly low level which is helping its exports but also leading to humungous and unsustainable large trade surpluses. 
    • A. 

      True

    • B. 

      False

  • 19. 
    You can always keep the foreign exchange value of your currency rising as long as you are willing to keep accumulating foreign exchange reserves. 
    • A. 

      True

    • B. 

      False

  • 20. 
    What is an economy?
    • A. 

      The factors of production, exchange, distribution, and consumption of goods and services of a country or other area.

    • B. 

      The factors of production, exchange, distribution, and consumption in a country or other area.

    • C. 

      The realized social system of production, exchange, distribution, and consumption of goods and services of a country or other area.

    • D. 

      The realized political system of production, exchange, distribution, and consumption of goods and services of a country or other area.

  • 21. 
    GDP is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).
    • A. 

      True

    • B. 

      False

  • 22. 
    Economists typically use “purchasing power parity” (PPP) exchange rates, which seek to measure the same _________________________________.
  • 23. 
     GDP = 
    • A. 

      GDP = corporate spending+ government investment + government spending + (exports − imports)

    • B. 

      GDP = consumption + gross investment + government spending

    • C. 

      GDP = consumption + government investment + government spending +

    • D. 

      GDP = consumption + gross investment + government spending + (exports − imports)

  • 24. 
    Why do nations trade?
  • 25. 
    You have 100 points to distribute amongst your team members and yourself. List their names and yours below in Pin Yin along with the amount of points you would distribute to each person based on the quality and level of their participation.