90 Questions
Which organization replaced GATT in 1995?
WTO
What is the main purpose of GATT?
To reduce tariffs and other trade barriers
Which trade agreement started as an alliance of coal and steel interests?
EU
What is the role of the WTO?
To negotiate free trade deals
What is the main purpose of the IMF?
To regulate international money supplies
What was the key currency after the Bretton Woods Agreement of 1944?
US Dollar
Which of the following best describes a trade surplus?
Exports are higher than imports
Which of the following best describes a trade deficit?
Imports are higher than exports
What does the balance of payments measure?
Goods, services, money spent, travel, and investments
What determines the price of a currency in the foreign exchange market?
Supply and demand
Where are exchange rates published daily?
The Wall Street Journal
If the exchange rate is $0.7437 and an item costs $300 in Canada, how much would it cost in US dollars?
$223.11
Which of the following is a key factor that can affect economic growth in a country?
Availability of natural resources
What is one way in which EDC's (economically developed countries) can benefit from the arrangement where the World Bank provides aid to LDC's (less developed countries)?
By lending money to LDC's
Which country has experienced rapid economic growth?
China
What does GDP stand for?
Gross Domestic Product
What is one reason why countries engage in trade?
To take advantage of comparative advantage
What is one common form of limiting trade?
Tariff
Which of the following is a characteristic of Economically Developed Countries (EDCs)?
High GDP and GDP per capita
What are the main factors that define Least Developed Countries (LDCs)?
Low GDP and GDP per capita, limited access to technology, and limited infrastructure
What is the main impact of poverty on LDCs?
Limited access to goods and services
What type of economy do LDCs have?
Duel economy
What are the major barriers to development in LDCs?
Limited natural resources, low level of human capital, shortage of investment capital, rapid population growth, and unfavorable political climate
Why do advanced countries provide foreign aid to LDCs?
Because it is moral and can promote development
Which one of the following best describes globalization in economic terms?
The interdependence of nations around the globe fostered through free trade.
What is the definition of supply chain?
The network between a company and its suppliers to produce and distribute a specific product to the final buyer.
What is the practice of basing some of a company's processes or services overseas to take advantage of lower costs called?
Offshoring
Which one of the following is an example of offshoring?
Capital One (a U.S. credit card company) moves its call centers to the Philippines.
What is the definition of outsourcing?
Obtaining goods or a service from an outside or foreign supplier, especially in place of an internal source.
Which one of the following is an example of outsourcing?
IBM hires an Indian company to develop software.
Which of the following is a major barrier to development in LDCs?
Limited natural resources
Which organization was replaced by the World Trade Organization (WTO) in 1995?
GATT
What is the main impact of poverty on LDCs?
Lower life expectancy
What is one reason why countries engage in trade?
To protect self interest
What determines the price of a currency in the foreign exchange market?
The supply and demand for the currency
What is the main purpose of the World Trade Organization (WTO)?
To reduce tariffs and trade barriers
What level of literacy is necessary to participate in the economy?
High literacy
What type of economy do LDCs have?
Traditional economy
What is the main reason for the shortage of investment capital in LDCs?
Hand to mouth existence
What is the main impact of rapid population growth in LDCs?
Potential starvation
Which trade agreement started as an alliance of coal and steel interests?
EU
What is the main impact of poverty on Less Developed Countries (LDCs)?
Limited access to education and healthcare
Which of the following best describes the balance of trade?
Exports minus imports
What is the balance of payments?
A measure of trade that includes goods, services, money spend, travel, and investments
What is the definition of supply chain?
The process of moving goods and services from the supplier to the consumer
Where are exchange rates published daily?
Wall Street Journal
If an item costs $300 in Canada and the exchange rate is $0.7437, how much would it cost in US dollars?
$223.11
What are equivalency rates used for?
Determining how much you will spend in a different currency
Which of the following is a key factor that can affect economic growth in a country?
Investments in human and physical capital
What determines the price of a currency in the foreign exchange market?
Demand and trade
What is one common form of limiting trade?
Tariff
What does GDP stand for?
Gross Domestic Product
What are the major barriers to development in LDCs?
Limited access to capital
Which one of the following best describes globalization in economic terms?
The process of opening markets and increasing international trade
Which of the following best describes offshoring?
Moving a company's processes or services to another country to take advantage of lower costs.
Which of the following best describes outsourcing?
Obtaining goods or services from a foreign supplier instead of an internal source.
Which of the following best describes globalization in economic terms?
The interdependence of nations around the globe fostered through free trade.
Which of the following best describes supply chain?
The network between a company and its suppliers to produce and distribute a specific product.
Which of the following best describes trade deficit?
A situation where a country's imports exceed its exports.
Which of the following best describes trade surplus?
A situation where a country's exports exceed its imports.
According to the text, what is the main reason for countries to engage in trade?
To promote economic growth
What is the main purpose of the World Bank providing aid to Less Developed Countries (LDCs)?
To promote development and reduce poverty
What is the main impact of poverty on LDCs?
Limited access to basic needs and services
What is the main reason for the shortage of investment capital in LDCs?
Limited natural resources
What is the main impact of rapid population growth in LDCs?
Increased strain on resources and services
What is one common form of limiting trade?
Tariff
Which of the following is NOT a characteristic of Economically Developed Countries (EDCs)?
Low level of education
What is the main impact of rapid population growth in LDCs?
Potential starvation
What are the major barriers to development in LDCs?
Limited access to capital
What is the main impact of poverty on LDCs?
Limited access to basic necessities
What level of literacy is necessary to participate in the economy?
Advanced literacy
Which of the following best describes offshoring?
Basing some of a company's processes or services overseas to take advantage of lower costs
Which of the following is the main purpose of the World Trade Organization (WTO)?
To negotiate free trade deals and eliminate trade barriers
Which organization was replaced by the World Trade Organization (WTO) in 1995?
The General Agreement on Tariffs and Trade (GATT)
What is the main impact of rapid population growth in Less Developed Countries (LDCs)?
Strain on limited resources and infrastructure
What is the practice of basing some of a company's processes or services overseas to take advantage of lower costs called?
Offshoring
What is one way in which Economically Developed Countries (EDCs) can benefit from the arrangement where the World Bank provides aid to Less Developed Countries (LDCs)?
Access to new markets and resources
What is the main impact of poverty on Less Developed Countries (LDCs)?
Strain on limited resources and infrastructure
Which one of the following best describes offshoring?
The practice of basing some of a company's processes or services overseas to take advantage of lower costs.
What is the main impact of rapid population growth in LDCs?
Increased demand for resources and services
What is the main reason for the shortage of investment capital in LDCs?
Limited access to financial markets
What is one reason why countries engage in trade?
To access goods and services that are not available domestically
What is the main purpose of the World Trade Organization (WTO)?
To promote free and fair trade between nations
Which one of the following is an example of outsourcing?
IBM hires an Indian company to develop software.
Which of the following best describes the balance of trade?
The balance of trade is the difference between a country's exports and imports.
What is the main purpose of the World Trade Organization (WTO)?
To promote and regulate international trade.
Where are exchange rates published daily?
Exchange rates are published daily in the Wall Street Journal.
What determines the price of a currency in the foreign exchange market?
The price of a currency in the foreign exchange market is determined by supply and demand.
What are equivalency rates used for?
Equivalency rates are used to determine how much one currency is worth in another currency.
What is the main impact of rapid population growth in LDCs?
Rapid population growth in LDCs can put strain on resources and infrastructure.
Quiz: Understanding the Benefits of Foreign Aid for Economic Development Test your knowledge on the benefits of foreign aid for economic development in this quiz. Explore how aid, both public and private, can promote development, with a focus on the role of international economic organizations like the World Bank. Learn about the advantages that economically developed countries (EDCs) can gain from providing aid to less developed countries (LDCs).
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