1. Economic & Government CRCT Review
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2. 1. What is one major benefit of using the Euro as a form of currency in Europe?
A. The Euro makes the price of goods cheaper for the people.
B. Currency doesn’t have to be exchanged at the border.
C. The Euro makes the standard of living higher for Europeans.
D. Euros cannot be copied into counterfeit currency.

3. B. Currency doesn’t have to be exchanged at the border.

4. 2. The countries of Germany, the United Kingdom and France have a high literacy rate. Which of the following is most likely true? A. These countries have struggling economies. B. These countries invest heavily in human capital. C. These are examples of third world countries. D. Little money is invested in education in these countries.

5. B. These countries invest heavily in human capital.

6. A. Germany invests little in capital goods.
3.Germany is a leader in the world in the development of machinery and technology. As a result, the assumption can be made that
A. Germany invests little in capital goods.
B. Germany lacks capital to invest in agriculture.
C. Germany invests heavily in capital goods.
D. Germany imports more than it exports.

7. C. Germany invests heavily in capital goods.

8. 4. What role do natural resources play in the development of a country?
A. Natural resources provide raw materials for producing goods.
B. A country with natural resources is very wealthy.
C. Countries with vast natural resources have a large military.
D. Natural resources play no role in the development of a country.

9. A. Natural resources provide raw materials for producing goods.

10. 5. Entrepreneurs take risks in order to
A. organize productive resources in order to make money.
B. seek political protection from the government for personal safety.
C. spend large sums of the government’s money.
D. provide money for low income citizens.

11. A. organize productive resources in order to make money.

12. 6. The governments of the United Kingdom and the United States share many things in common. However, the leader of the government in the United States is the president who is elected by the people and the leader of the government in the United Kingdom is the prime minister who is elected by
A. Queen Elizabeth
B. the Supreme Court of England
C. Parliament
D. the Archbishop of Canterbury

13. C. Parliament

14. 7. The British Parliament has two parts: the House of Lords and the House of Commons. The House of Commons is
A. appointed by the House of Lords.
B. elected by the people.
C. appointed by the Queen.
D. appointed by the Supreme Court.

15. B. elected by the people.

16. 8. Which form of government allows its’ citizens the most personal freedom?
A. autocratic
B. democratic
C. oligarchic
D. monarchy

17. B. democratic

18. 9. Which country in the Americas is the only communist nation with a dictator?
A. Brazil
B. Cuba
C. Canada
D. Mexico

19. B. Cuba

20. 10. Which of the following sentences describes a country with a mixed economy?
A. Prices and wages are completely controlled by the government.
B. There is a combination of privately-owned industry and government control.
C. A country’s distribution of resources is based on inheritance.
D. Prices and wages are solely determined by the laws of supply and demand.

21. B. There is a combination of privately-owned industry and government control.

22. 11. Colombia produces bananas for export to the United States and the United States produces Chevrolets for export to Colombia. Both countries profit by this exchange. This is an example of:
A. barter
B. comparative advantage
C. services
D. specialization

23. D. specialization

24. 12. A country’s national congress votes to increase tariffs on goods from another country. This is an example of
A. a communist government allowing freedom of speech.
B. a socialist congress preventing free enterprise.
C. a monarchy encouraging free trade.
D. a representative democracy restricting trade.

25. D. a representative democracy restricting trade.

26. 13. How does Mexico benefit from oil as a natural resource?
A. Oil is Mexico’s biggest export and the U.S. is its largest buyer.
B. Mexico uses all of its oil to provide fuel for its own industries.
C. Mexico imports almost all of the oil that it uses.
D. When Mexico nationalized the oil industry, the wells were abandoned.

27. A. Oil is Mexico’s biggest export and the U.S. is its largest buyer.

28. 14. The people who assume risk by bringing natural resources, labor resources, and capital resources together to produce goods and services are known as
A. suppliers
B. auditors
C. entrepreneurs
D. unionizers

29. C. entrepreneurs

30. 15. Great Britain’s monarch is the head of state of Australia
15. Great Britain’s monarch is the head of state of Australia. What does this mean?
A. The British monarch has no real power in Australia.
B. The British monarch can veto legislation in Australia.
C. Australians do not have the right to vote.
D. The monarch and the prime minister have equal powers.

31. A. The British monarch has no real power in Australia.

32. 16. The people of Australia participate in the democratic process which means
A. they have no voice in how the government operates.
B. they allow the British monarch to make decisions for them.
C. they are actively involved in making the government work.
D. they gave up their political power when the British took control of Australia.

33. C. they are actively involved in making the government work.

34. 17. Australia has a strong market economy which means
A. the economy is near collapse.
B. all trading is controlled by the government.
C. they only trade with their closest neighbors.
D. they have relatively free trade with other nations.

35. D. they have relatively free trade with other nations.

36. 18. Australia’s economy depends on mining and farming
18. Australia’s economy depends on mining and farming. Since Australia is the world’s leading producer of coal…
A. Australia is able to export large amounts of minerals.
B. Australia is unable to mine enough minerals to be profitable.
C. Australian industries use up all of the minerals.
D. the Aborigines have become very wealthy.

37. A. Australia is able to export large amounts of minerals

38. 19. What is a basic way citizens of a democratic nation can influence the government?
A. voting
B. working
C. obeying laws
D. consuming goods

39. A. voting

40. 20. Which type of government would most likely abolish all opposing political parties, the direct election of leaders, and free speech? A. republic B. constitutional monarchy C. autocratic D. representative democracy

41. C. autocratic

42. 21. Which best describes how a parliamentary democracy differs from a presidential democracy?
A. The legislature consists of two houses.
B. There are usually two major political parties.
C. There are state as well as national governments.
D. The head of the government is a member of the legislature.

43. D. The head of the government is a member of the legislature.

44. 22. Russia has a type of government in which power is formally divided between one central authority and several regional authorities. Name the type of government.
A. Federation
B. Dictatorship
C. Oligarchy
D. Constitutional Monarchy

45. A. Federation

46. 23. An example of economic cooperation among European nations that occurred in the late 1900s was the
A. creation of the United Nations.
B. signing of the Treaty of Versailles.
C. creation of the League of Nations.
D. introduction of the Euro.

47. D. introduction of the Euro.

48. 24. What is one of the goals of the European Union (EU), which was established in the 1990s?
A. It is a special stock market for European businesses.
B. It provides better training for people wanting to run businesses.
C. It provides its members with military protection from foreign attack.
D. It is a system to remove tariff barriers and open trade between countries.

49. D. It is a system to remove tariff barriers and open trade between countries.

50. 25. When a country has a market economy, which of these statements correctly defines this system?
A. Workers are guaranteed a pay raise every year.
B. The government controls most of the businesses in the country.
C. Basic goods in the country are provided to all people without charge.
D. Companies produce goods of their choice and consumers decide whether to buy the goods.

51. D. Companies produce goods of their choice and consumers decide whether to buy the goods.

52. 26. Which word has the same meaning as the economic term "tariff"?
A. tax
B. savings
C. debt
D. money

53. A. tax

54. 27. The United Kingdom Customs Service has found toxic lead-based paint in toys imported from a Chinese toy-making company. These toys are intended for sale in the United Kingdom. Exposure to the paint over a long period of time could be fatal to children under 6 years old.
What type of trade barrier would guarantee that no child in the United Kingdom would be exposed to the deadly lead-based paint?
A. embargo
B. quota
C. exchange rate
D. tariff

55. A. embargo

56. 28. What is the purpose of a tariff, such as a protective tariff?
A. to increase the prices of imported goods and protect a country's own industries from foreign competition
B. to decrease the prices of imported goods so a country's people can buy what they need for the lowest cost
C. to increase the prices of exported goods so a country's own businesses are less likely to send their products to other nations
D. to decrease the prices of exported goods so people in other countries will buy the foreign nation's product over one from home

57. A. to increase the prices of imported goods and protect a country's own industries from foreign competition

58. 29. You are watching a speech by the President of the United States on T.V. 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:
a. an investment in human capital will increase the country’s gross domestic product (GDP)
b. adjusting the exchange rate will increase the profit the U.S. makes in international trade
c. an investment in capital goods will increase the country’s gross domestic product (GDP)
d. an embargo on technology from other countries will help the U.S. economy

59. The President’s plan is based on the conclusion that:
a. an investment in human capital will increase the country’s gross domestic product (GDP)