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Unit 10 Test Review KEY:
Economic Systems of Latin America and the Caribbean
1. As with any small island country, Cuba
has fewer natural resources than
countries such as Brazil. This affects their
trade in that Cuba
*needs to import more products
2. The number limit on how many items
of a particular product can be imported
from a particular country is the
*quota
3. The economic system of communist
countries is most closely related to which
of the following:
*command economy
4. What three economic questions are
asked when studying the similarities of
traditional, command, market, and mixed
economies among nations of the world?
*what to produce, how to produce, and
for whom to produce
5. The relationship between the literacy
rate and standard of living in Latin
America is
*the higher the literacy rate the higher
the standard of living
6. Economic decisions based on customs
or beliefs are found in a
*traditional economy
7. In a command economy, economic
decisions are made by the
*government
8. Which is an example of human capital?
*education
*a combination of privately owned
industry and government control
10. Which trade barrier discourages trade
by placing a tax on foreign goods?
*tariff
11. What is NOT an example of an
economic trade barrier?
*mountain
12. The North American Free Trade
Agreement (NAFTA) is an example of
which pattern of behavior among
countries?
*forming trade agreements
13. Which country is the closest to having
a command economic system?
*Cuba
14. The literacy rate for the region of
Latin America is 90%. In the country of
Haiti, the literacy rate is 51%. Which
statement best reflects these factors of
economic growth in Haiti?
*Haiti’s low investment in human capital
lowers the GDP per capita (per person)
15. Brazil is building new factories and
using newer technology. These are
examples of
*investment in capital goods
16. Jose is an auto mechanic in a nearby
town. He has decided his own small town
needs its own car repair shop. Jose is an
example of
*entrepreneur
9. Which of the following would reflect a
country with a mixed economy?
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17. The North American Free Trade
Agreement (NAFTA) was designed to
promote free trade between the United
States,
*Canada and Mexico
20. Most democratic nations have
_______ economies.
*mixed
18. What is an entrepreneur?
*a person who starts a new business
21. Which economic term is used to
describe a lack of a particular resource,
such as water, food, or oil?
*Scarcity
19. When a government decides to
increase a tariff, it increases the amount
of a tax placed upon
*imported goods
22. What do the economic systems of
Brazil, Mexico, & Canada have in
common?
*all are examples of mixed economies
23. You are a small business owner and you sell computer gaming consoles. You have
chosen to sell this product to teenagers and young adults. You decided to sell consoles
because they are easy to build, popular, and make a high profit. You decide on the prices
of your consoles based ONLY on the following factors:
 How many consoles you have in your warehouse, and
 How many consoles you are selling each week
Which type of economy do you have?
market
24. The Brazilian Customs Service has found toxic lead-based paint in toys imported from
a Chinese toy-making company. These toys are intended for sale in Brazil. Exposure to the
paint over a long period of time could be fatal to children under six years of age.
What type of trade barrier would guarantee that no child in Brazil would be
exposed to the deadly lead-based paint?
embargo
25. You are watching a speech by the President of the United States on TV with your
parents. The President is explaining a plan for improving the U.S. economy. In the
speech, the President says:
“Our workers must be prepared for the high-tech jobs of the 21st century. My plan
will give incentives to companies who provide technology education and training for
their employees.”
The President’s plan is based on the conclusion that:
An investment in human capital will increase the country’s GDP
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26. You are still watching the speech by the President where he is explaining the
plan for improving the U.S. economy. He just made the following statement:
“Our workers must be prepared for the high-tech jobs of the 21st century. My plan
will give incentives to companies who invest in up-to-date computers, new office
buildings, and wireless communications systems.”
This part of the President’s plan is based on the conclusion that:
An investment in capital goods will increase the country’s GDP
27. You own Olympic Fish Company, a fleet of fishing ships in the islands of Greece.
Greece is a member of the European Union, and uses the euro as its currency. You make
your living selling fish to your customers, mostly in other countries. Today you have
received two orders:
Order #1
To: Olympic Fish Co.
From: France Fish Market
Order #2
To: Olympic Fish Co.
From: Miguel’s Meals (Mexico)
100 tons of sea bass
100 tons of sea bass
Note: France is an EU member
that uses the euro.
Note: Payment in Mexican pesos
ONLY.
Based on what you see in the two orders above, which of the orders is easier
for you to fill?
Order #1 because trade with France is easier since it uses the euro
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