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Name ____________________
Chapter 3 Study Guide
Business in the Global Economy
1. Is foreign debt the amount of money that other countries owe the United States? Y/N
2. If a country imports more than it exports, does it have a trade deficit? Y/N
3. Does supply and demand affect the exchange rate? Y/N
4. Does a country’s infrastructure refer to its climate and natural resources? Y/N
5. Are tariffs on certain goods used to restrict free trade? Y/N
6. Is the North American Free Trade Agreement (NAFTA) an agreement created by the
United States, Mexico, and Japan? Y/N
7. Does licensing have a low financial investment and a high potential financial return? Y/N
8. Are franchise agreements popular with fast-food companies such as McDonald’s,
Wendy’s, and Burger King? Y/N
9. The primary effects on a country’s level of economic development are its
literacy level, agricultural dependency, and _________________________.
10. Making, buying, and selling goods and services within a country is referred
to as _______________________.
11. When a country can produce a particular good or service at a lower cost than
other countries, a(n) ______________ _____________ exists.
12. The _____________ _______________ is the value of currency in one country
compared with the value of currency in another.
13. Trade barriers can include tariffs, embargoes, and ______________________.
14. An agreement between two or more companies to work together on a
business project is called a(n) ______________ ______________.
15. A(n) _____________ _______________ is also known as an economic community.
A. World Trade Organization (WTO)
B. The World Bank
C. North American Free Trade Agreement (NAFTA)
D. The International Monetary Fund (IMF)
16. ____ Maintains a system of world trade and exchange rates.
17. ____ Created after World War II to provide loans for rebuilding
18. ____Settles trade disputes and enforces free-trade agreements between member countries.
19. ____ Key function is to provide economic aid to less developed countries.
20. ____ Does away with taxes on goods traded among the member countries.
The currency exchange rate changes constantly based on factors such as a country’s balance of
payments, economic conditions, and political stability. Visit the web site for the Universal Currency
Converter at and check the value of those currencies today. Fill in the
blanks to indicate each currency’s units per USD.
South Africa
South Korea
USD Value