1. Reviewing Key Terms
Match the following terms with the descriptions below.
A. factors of production F. developing nations B. newly developed nations G. trading bloc C. command economy H. tariffs D. gross national product I. market economy E. comparative advantage J. quotas
___ 1. an economy in which the government makes most of the economic decisions
___ 2. an economy in which consumers make most of the economic decisions
___ 3. the resources that an economic system needs to produce goods and services
___ 4. nations with little or no industry
___ 5. nations recently having significant or rapid industrial growth C I A F B
Chapter Assessment 2

2. Reviewing Key Terms ___ 6. the sum of a nation’s goods and services
Match the following terms with the descriptions below.
A. factors of production F. developing nations B. newly developed nations G. trading bloc C. command economy H. tariffs D. gross national product I. market economy E. comparative advantage J. quotas
___ 6. the sum of a nation’s goods and services
___ 7. principle that each country should produce the goods it can make efficiently and trade for other goods
___ 8. taxes placed on imports to increase their price in the domestic market
___ 9. limits on the quantities of a product that may be imported
___ a group of nations that trade without economic barriers D E H J G
Chapter Assessment 3

3. Recalling Facts 1. What are the four factors of production?
The four factors of production are land, labor, capital, and entrepreneurs.
2. What is the role of competition in the free enterprise system?
Competition is an essential ingredient for a free enterprise system. It helps ensure that the consumer will get products of good quality at low prices.
Chapter Assessment 4

4. Recalling Facts 3. Where are most newly developed nations located?
Most newly developed nations are located in Eastern Europe, the Middle East, Asia, and South America.
4. How has China’s growing economy impacted the United States?
Trade with China is opening new American markets; U.S. investment in China is increasing; changes provide new sources of income for some American workers and professionals; some American industries are harmed because they cannot compete with low Chinese labor costs; China’s future relationship with the U.S. is uncertain.
Chapter Assessment 5

5. Recalling Facts
5. What are the causes of a lack of national unity in some developing nations?
When colonial rulers left, fears and hatreds based on ethnic, regional, religious, racial, and language ties surfaced.
Chapter Assessment 6

6. Understanding Concepts
1. Free Enterprise How did Soviet agricultural policy differ from the policy practiced in the United States?
Crops were sold at uncontrolled prices; team workers’ pay was based on how hard the workers worked and how much they produced.
Chapter Assessment 7

7. Understanding Concepts
2. Global Perspectives What are the differences between the traditional and the new economic goals to promote development in developing nations?
Goals have shifted from increasing the GNP to improving people’s lives.
Chapter Assessment 8

8. Critical Thinking
1. Making Comparisons Use a graphic organizer like the one below to compare land ownership in a capitalist system with that in a planned economy.
Capitalist system—land is privately owned with some government ownership to provide public services; Planned economy—all land is owned by the government
Chapter Assessment 9

9. Critical Thinking
2. Drawing Conclusions Why might industrialized nations such as the United States exercise influence on developing nations to develop free market economies and democracy?
Answers will vary but may include that new free market, democratic nations might become good trading partners and provide markets for products.
Chapter Assessment 10

10. Interpreting Political Cartoons Activity
1. What comparison is the cartoonist making?
Tensions between legislative and executive branches of government are apparent in both Russia and the United States.
Chapter Assessment 11

11. Interpreting Political Cartoons Activity
2. Do you think the comparison is a valid one? Why or why not?
Answers will vary. However, the United States has balanced these powers during a long period of stable government.
Chapter Assessment 12

12. Interpreting Political Cartoons Activity
3. This cartoon was published in Are the issues it raises still applicable today? Explain.
The issues it raises may always be applicable because as long as different branches of government exist, there will always be a struggle for power between them, especially if different groups control the two institutions.
Chapter Assessment 13

13. Interpreting Political Cartoons Activity
4. How do you think the economic situation in a country affects its political climate?
The economic situation in a country may affect how citizens perceive the effectiveness of their government.
Chapter Assessment 14

14. What is the formal name of the World Bank, and under whose authority does it operate?
A United Nations agency, it is known formally as the International Bank for Reconstruction and Development.
Chapter Assessment 15