ECO 365 Week 5 Knowledge Check
Questions to ECO 365 Week 5 Knowledge Check are as follow:
1. What problem do economists see with free trade areas such as
NAFTA and the European Union?
• They tend to lead to free trade rather than fair trade.
• They can lead to regional trading blocs then restrict trade.
• They lead to globalization.
• They encourage countries to rely on others rather than being self-sufficient
2. A group of countries that allows free trade among its members and puts up common barriers against all other countries' goods is
• a tariff-free zone
• a most-favored nation agreement
• an autarky
• a free trade association
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• oppose free trade
• favor free trade
• have no opinion on free trade
• Would prefer to have no trade with other nations
7. World trade declined in the 1930s. Which of the following is the best explanation of that decline?
• World income shrank and trade restrictions increased.
• World income shrank, but there were few changes in trade
• Trade restrictions increased, but there was little change in world income
• The incomes of most nations increased, allowing them to become more self-sufficient.
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8. As a country develops economically, what changes usually take place in the goods it exports?
• There is little change because comparative advantage does not change.
• Raw materials and agricultural products decline in importance and are replaced by services and manufactured goods.
• Services and manufactured goods decline in importance and are replaced by raw materials and agricultural products.
• Exports go from being diversified to being specialized in whatever the country finds to be its comparative advantage.
9. When a U.S. company establishes a call center in India that answers its customer service calls, the United States is
• outsourcing, a form of importing services
• outsourcing, a form of exporting services
• in sourcing, a form of importing services
• in sources, a form of...