SQA Higher Economics Global Economic Activity overview quiz quiz

Produce everything it needs itself and avoid trading abroad

Specialise in goods it produces at the lowest opportunity cost and trade for the rest

Only trade with countries that are less efficient than itself

Import every good and produce nothing at all domestically

Removing all taxes on imported goods

Encouraging firms to export as much as possible

Allowing the currency to float freely on the market

A tariff, which is a tax placed on imported goods

Raises prices for consumers and risks retaliation by trading partners

Always lowers prices for consumers everywhere in the world

Forces domestic firms to become much more efficient overnight

Has no effect on either prices or trading relationships

Sells its products in only one single country

Is owned entirely by a national government

Owns or controls production in more than one country

Trades only in financial services and never in goods

To pay the highest possible taxes on its profits

To avoid the tariffs and quotas that would apply to imports

To make its products as expensive as possible to buy

To reduce the size of the market it can sell to

New jobs that reduce unemployment in the area

Transfer of modern technology and skills to local workers

Higher tax revenue to fund public services

Profits being sent abroad rather than reinvested locally

Exports and other credits exceed imports and other debits

The country only trades with developing economies

Imports and other debits exceed exports and other credits

The government has a budget deficit in a single year

Allowing the exchange rate to fall, making exports cheaper and imports dearer

Raising the exchange rate to make exports more expensive abroad

Encouraging households to spend much more on imported goods

Removing all support for domestic export industries

A fixed value set permanently by the government

The demand for and supply of the currency on the foreign exchange market

The total number of banks operating in the country

The rate of value added tax charged on goods

Makes imports dear and exports cheap

Has no effect on imports or exports at all

Makes both imports and exports much cheaper

Makes imports cheap and exports dear

Imported goods and raw materials become more expensive in domestic currency

Exports become cheaper for foreign buyers to purchase

The money supply automatically falls when the currency drops

Interest rates are always cut at exactly the same time

An abundance of capital and very high levels of saving

A highly skilled workforce with excellent health and education

Heavy foreign debt and dependence on a few volatile commodity exports

Strong institutions with no corruption and full political stability

To oversee trade rules, promote free trade and settle trade disputes

To lend money to households struggling with their bills

To set interest rates for every country in the world

To run the national health services of developing countries

The World Bank sets exchange rates while the IMF builds roads

The World Bank funds long-term development to reduce poverty, while the IMF handles short-term financial stability and crisis lending

They have identical roles and are really the same organisation

The World Bank only deals with rich countries and the IMF only with poor ones

It benefits every country equally with no costs at all

It harms every country and brings no benefits whatsoever

It only ever affects developed economies, never developing ones

It can spread growth, jobs and technology but may also widen inequality and increase volatility