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

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10 Written questions

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

2. The current rate or price

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

4. A tax levied by countries on imports or exports

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

6. -manufactured goods
-mining
-agricultural products

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

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

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

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

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

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