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Africa Economics Assessment SS7E1, E2, E3 Study Guide with Answer1)· Decentralized decision making.· Adjusts to changes in the market place.· Producers and consumers have control of the economy.All of these are characteristics of a ___ economy.A)commandC)socialistB)marketD)traditionalExplanation:A market economy?emphasizes freedom of producers and consumers in the marketplace rather than equal distribution of wealth.2)?Nigeria's film industry is famous throughout Africa. It is sometimes referred to as "Nollywood." After the United States and India, Nigeria ranks third in the production of movies. What might be one way Nigeria's film industry BENEFITS the country?economically?A)It provides jobs for thousands of people.C)It may encourage positive stereotypes about Americans.B)Nigerians attend fewer concerts and plays.D)Nigerian actors may become famous in America and earn large salaries.Explanation:Of the choices, the correct answer is that?it provides jobs for thousands of people.?The question talks about the largeness of Nigeria's film industry, so it would stand to reason, then, that many people would be employed.3)?Tariffs, quotas, and subsidies are examples ofA)free trade.C)trade incentives.B)trade barriers.D)restrictive licenses.Explanation:Tariffs, quotas, and subsidies are examples of?trade barriers.?Tariffs (taxes), quotas (limits or maximums on goods that can be traded), and subsidies (government payments to producers to help make goods) affect the price of a good, which in turn affects its ability to be consumed.4)?Which is an example of a capital resource?A)metal toolsC)an abundance of coalB)low-cost laborD)a clean water supplyExplanation:Metal tools?are capital resources because they are made by people and used to make other goods.5)?Which of these is a correct description of one of the ways in which a command economy differs from a market economy?A)Market economies discourage free enterprise.C)Command economies tend to have a higher per capita GDP.B)In a market economy, the government sets prices.D)In a command economy, individuals have less economic freedom.Explanation:In a command economy, individuals have less economic freedom?since the government makes the major economic decisions. Typically, command economies are less efficient than market economies resulting in a lower per capita GDP.6)?In a traditional economy, the decision to make (or not make) certain products is decided MOSTLY byA)custom.C)government.B)entrepreneurs.D)producers.Explanation:In a traditional economy, the decision to make (or not make) certain products is decided by?custom?or habit. There are very few places on earth in which this is the case, but each economy has a tiny bit of this in it. (The period around the Christmas season is a good example of this.)skills of citizenshealth of citizenseducation of citizensvalues of citizens7)What do these factors MOST LIKELY represent?A)human capitalC)economic investmentB)literacy rateD)life expectancy rateExplanation:These factors represent?human capital. Human capital is the health, education, experience, skills, and values of people. Countries that work on improving these areas usually see an increase in the economic prosperity of their citizens.8)?Increased education and training within a nation will most likely result inA)a decrease in entrepreneurship.C)an increase in Gross Domestic Product (GDP).B)a decrease in Gross Domestic Product (GDP).D)an increase in the presence of natural resources.Explanation:Increased education and training within a nation will most likely result in?an increase in Gross Domestic Product (GDP).?An increase in a nation's literacy rate and a well-trained workforce will result in an increased ability to produce income and an increased GDP.9) In South Africa, only 20.1% of the GDP is devoted to capital investment while in Nigeria, capital investment accounts for 40.2% of the GDP. Which will be the most likely result?A)South Africa will have a higher GDP and literacy rate than Nigeria.C)Nigeria will have more factories, machinery, and technology than South Africa.B)South Africa will have more factories, machinery, and technology than Nigeria.D)Nigeria will enact tariffs and trade barriers to increase its trade with foreign nations.Explanation:If South Africa only devotes 20.1% of its GDP to capital investment while Nigeria spends 40.2% of its GDP on capital investment, the most likely result will be that?Nigeria will have more factories, machinery, and technology than South Africa. None of the other answer choices offer logical results from increased capital investment.10) How might specialization encourage trade?A)One nation will sell its specialty to others ONLY if they don't compete.C)Nations agree to work together as a team to make it easier for them to manufacture expensive items.B)Nations stop using products from other nations to support their own economies.D)One nation will focus resources on its specialty, forcing it to buy other products from other nations.Explanation:One nation will focus resources on its specialty, forcing it to buy other products from other nations.?It is usually most beneficial for a country- or even a person- to focus on doing some things very well, rather than doing all things at a substandard level. This is the idea behind specialization..11)?What of these has historically been South Africa's most profitable activity?A)farmingC)manufacturingB)fishingD)miningExplanation:South Africa's most lucrative economic activity is?mining. Gold and diamond mines have historically provided the country with much of its wealth. The area around Johannesburg was the site of a major gold strike in the late-1800s, causing the small town to grow into a major metropolis.12)? Producers and consumers own the factors of production? Custom and habit answer the question of who, what and how to produce? Outside trade and commerce is discouraged? Roles within the community are defined by custom and genderWhat type of economic system is described?A)CommandC)MixedB)MarketD)TraditionalExplanation:A?traditional?economy is an economy that the consumers and producers own the factors of production, but custom and habit answer the three questions. Most roles within the economy are determined by gender and custom. Traditional economies are successful if all needs are met within the community.13)?Why are foreign exchange rates are necessary in trade?A)Rates help to balance imports and exports.C)Rates help to compare prices stated in foreign currency.B)Rates help ensure cultural exchanges across borders.D)Rates help to compare the supply and demand of goods traded between countries.Explanation:Rates help to compare prices stated in foreign currency.?Currency exchange rates are necessary to make comparisons in prices.14)As the map illustrates, Africa is exceedingly rich in natural resources, chiefly precious metals and oil. A significant part of the continent makes its money on diamonds, gold or oil.How does this map relate to the distribution of natural resources for countries such as Nigeria?A)Nigeria has no natural resources. They need to develop industry and import raw materials in order to export finished goods.B)Nigeria is rich in gold and diamonds, and they need to learn to mine these resources effectively in order to trade for other resources from other African countries.C)Nigeria has many natural resources; however, they are land-locked and need to effectively work with other nations to move natural resources through other countries for exporting.D)Nigeria is rich in oil and natural gas, and they need to drill for petroleum products effectively and develop refineries in order to trade for other resources from other African countries.Explanation:Nigeria is rich in oil and natural gas, and they need to drill for petroleum products effectively and develop refineries in order to trade for other resources from other African countries. Petroleum products such as oil and natural gas are highly desirable all over the world. If Nigeria not only pumps the oil but is able to refine it, they are able to sell a finished product for trading purposes.15)Based on this photograph of downtown Johannesburg, South Africa, it can be determined that South AfricaA)has yet to develop economically.C)lags behind the rest of the world economy.B)relies on traditional economic practices.D)has many of the technological advantages of European countries.Explanation:Notice the types of buildings, their sizes, as well as the technology all around the city. You can tell that Johannesburg?has many of the technological advantages of European countries.?It is one of the most economically developed major cities in all of Africa.16)The Sub-Saharan area of Africa is known for its rich mineral wealth, such as gold, diamonds, oil and tungsten. It is a source of great wealth, but also a source of war and exploitation in history by colonial powers.What major economic problem has this led to in the countres of Sub-Saharan Africa?A)no lack of manufacturing capabilities and no need for exporting of finished goods and servicesC)lack of manufacturing capabilities and the need for major importing of finished goods and servicesB)lack of manufacturing capabilities and no need for major importing of finished goods and servicesD)no lack of manufacturing capabilites, but a need for countries to export finished goods and servicesExplanation:A?lack of manufacturing capabilities and the need for major importing of finished goods and services?has held great economic stress upon the Sub-Saharan African countries. War and other factors have led to the area being stripped of minerals and the exporting of those minerals, but a lack of infrastructure to build manufacturing capabilites to make final goods and services.17)?Which of these is the BEST definition of "literacy rate"?A)the ability to speak one or more languages fluentlyC)the measure of a country's reading level compared to that of other countriesB)the ability to read and write at an appropriate and functional levelD)the percentage of people who are able to read and write as compared to those who cannotExplanation:"Literacy" is the ability to read and write. "Literacy rate" is?the percentage of people who are able to read and write as compared to those who cannot. This is often a good indicator as to the standard of living of a country: the higher the literacy rate, the higher the standard of living.18)Which of these has the BIGGEST negative impact on North Africa's economy?A)The SavannasC)The Kalahari DesertB)The Sahara DesertD)The Mediterranean SeaExplanation:Of these choices,?the Sahara Desert?has the biggest negative impact on North Africa's economy. Transporting goods across this is very difficult, and crops cannot be grown there because of the lack of rainfall and the extreme heat.19)In Nigeria, people can open their own businesses, choose their careers and job paths, and can purchase a wide array of consumer goods. However, the national government institutes tariffs on imported goods, has a significant share in the oil industry, and regulates much of the country's industry.Based on this description, Nigeria could BEST be categorized as a ___ economy.A)CommandC)MixedB)MarketD)TraditionalExplanation:Note that even though people have economic freedom to start businesses and make and buy what they want- and aspect of a Market economy- the government has significant say in the country's economy- a hallmark of a Command economy. Because of this, it is true that Nigeria's economy can be classified as "Mixed."20)In Nigeria, people can open their own businesses, choose their careers and job paths, and can purchase a wide array of consumer goods. However, the national government institutes tariffs on imported goods, has a significant share in the oil industry, and regulates much of the country's industry. Still, Nigeria has a well-developed financial and communications sectors, a national stock exchange, and an abundance of natural resources,Where does this description put Nigeria on a continuum between pure market and pure command?A)almost all Command EconomyC)more Market than Command EconomyB)more Command than Market EconomyD)almost all Market EconomyExplanation:This description puts Nigeria in an area of?more Market than Command Economy?on such a continuum. Technically, you could call Nigeria a "Mixed" economy- as you could most in the world.21) Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargoes. You?must?use complete sentences when writing your response. ................
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