Eco 365 Week 5 Knowledge Check Essay
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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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 Restrictions • 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 •