II.

Please answer the following questions to the best of your ability without consulting any materials and without the assistance of another person. This test is part of a nationwide statistical study and will not affect your grade in this course. 1: Gross domestic product (GDP) is a measure of: the price level of goods and services sold. total spending by federal, state, and local governments. the quantity of goods and services produced by private businesses. the market value of all goods and services produced by a nation in one year's time. 2: Which statement about tariffs is true? Tariffs increase the market for exports. Tariffs decrease employment in protected industries. Tariffs benefit some groups at the expense of others. Tariffs encourage the growth of a nations most efficient industries. 3: Which of the following groups would benefit most from a policy of free trade? Workers Manufacturers Stockholders Consumers 4: A countrys potential output at any time is limited by: the quantity and quality of labor, capital, and natural resources. the global demand for its goods and services. government regulations and spending. the amount of money in circulation. 5: One reason a countrys government might reduce taxes is to: slow down the rate of inflation. slow down a rapid rise in interest rates. decrease business spending on plant and equipment. increase consumer spending and stimulate the economy. 6: People and countries engage in the voluntary exchange of goods, services and cultural interactions when: They are seeking an advantage over the other party. They both expect to gain something of value.

Their governments are enforcing policies designed to increase international commerce. They are willing to sacrifice their own wellbeing for the good of others. 7: When a nations human and material resources are fully employed, more of any one product: can be produced only if private enterprise does so rather than government. can be produced only if there is less production of other products. can be produced only if there is a general decrease in prices. cannot be produced. 8: In every economic system, people must choose how to: satisfy all of the wants of society. make the best use of scarce resources. create an equal distribution of income. save money to reduce the national debt. 9: When the United States trades wheat to Saudi Arabia in exchange for oil: both countries gain. both countries lose. the United States gains, Saudi Arabia loses. Saudi Arabia gains, the United States loses. 10: Exporters wish to sell their products at high prices. Importers wish to buy products at low prices. In a global market economy, this conflict of interest would be resolved by: lawsuits governments competition collective bargaining 11: The National Debt of the United States has increased at least $500 billion each year since 2003. About 13% of the total debt is owed to China. What is the total approximate amount of national debt owed by the U.S. government in 2012? $16.5 trillion ($52,000 per person) $15.5 trillion ($49,000 per person) $14.5 trillion($46,000 per person) $13.5 trillion ($43,000 per person) 12: International trade usually leads to greater global competition in regard to:

Introducing new products Product quality Product price All of the above 13: Which of the following is the most accurate depiction of the world today: Population 5.4 billion, Life expectancy 46 years; Most spoken language Spanish Population 6.9 billion; Life expectancy 67 years; Most spoken language Chinese Population 7.2 billion; Life expectancy 56 years; Most spoken language English Population 6.1 billion; Life expectancy 39 years; Most spoken language Arabic 14: Which would usually reduce total spending in a countrys economy? A decline in consumer incomes. A reduction in personal income taxes. An expectation that prices will soon rise. An increase in investment in new plant and equipment. 15: Globalization, in the near term, means that: Conditions in one country have an increasingly greater impact on conditions in other countries. One countrys benefit will always be balanced by another countrys loss. The economies of all countries can be expected to improve over time. It will be easier for the United States to retain its economic leadership position. 16: Which three countries are the top trading partners of the U.S. in terms dollar value of trade? China, Mexico, Germany China, Canada, Mexico China, Mexico, Japan China, Canada, Germany 17: The exchange rate between the US dollar and the German mark changes from $1.00 = 1.80 marks to $1.00 = 1.60 marks. This change means that: US products will be more expensive for Germans. German products will be more expensive for Americans. There will be an increase in US imports from Germany. There will be a decrease in German imports from the US.

18: Which of the following is most important in increasing a nations economic growth in the long run? investment in education, infrastructure and technology higher levels of government spending increasing exports and decreasing imports increasing consumer spending in the economy 19: Which best measures a nations standard of living over time? Rate of inflation. Rate of unemployment. Real gross domestic product (GDP) per capita. Money income per capita. 20: Specialization and division of labor by nations followed by increasing international trade probably would: increase the level of worldwide unemployment. increase world production of goods and services and the global standard of living. lower living standards in the poor nations of the world. eliminate differences in standards of living among nations. 21: A country would experience a decline in its unemployment rate when there is: an increase in population. an increase in economic growth. a decrease in consumer incomes. a decrease in business investment. 22: If Britain has a comparative advantage over France in the production of cars, then: the opportunity cost of producing cars in Britain is lower than in France. the opportunity cost of producing cars n Britain is higher than in France. there are no gains from specialization and trade in cars between Britain and France. only Britain will gain from specialization and trade in cars between Britain and France. 23: The opportunity cost of a new public high school is the: the cost of hiring teachers for the new school. cost of constructing the new school at a later date. change in the annual tax rate to pay for the new school. other goods and services that must be given up for the new school.

24: Which nation has a population of 23 million including Sunni, Druze and Alawite Muslims as well as Christians , a GDP that has been shrinking by 2-5% annually, serious civil unrest since 2011 resulting in 60,000 deaths by January 2013, and is subject to economic trade sanctions by the EU, USA and the Arab League? Egypt Iran Syria Afghanistan 25: The largest category of goods both imported and exported by the United States is: energy products. raw materials. food products. capital goods.