SEVI 2053 UPDATED Exam Questions and
CORRECT Answers
Which of the following is not one of the fundamental assumptions of Adam Smith's
capitalism?
a. Individuals must own private property and the resources used to create wealth.
b. The role of government should be limited to providing defense against foreign enemies,
ensuring internal order, and furnishing public works and education.
c. Economic freedom ensures the existence of competitive markets that allow both sellers and
buyers to enter and leave the market as they choose.
d. The key industries are owned and controlled by the government. - Correct Answer- D - The
key industries are owned and controlled by the government.
When Delta Air Lines, American Airlines, and a few other firms dominate the U.S. airline
industry, this is an example of _______.
a. pure competition
b. monopolistic competition
c. oligopoly
d. monopoly
e. natural monopoly - Correct Answer- C - oligopoly
Which of the following is the Federal Reserve applying when it lowers the interest rate
charged to banks on short-term loans?
a. Monetary policy
b. National debt
c. Inflation
d. Fiscal policy
e. Competition export duty - Correct Answer- A - monetary policy
When the United States levies a tax on textiles from Cambodia, this tax is a type of _______.
, a. export duty
b. licensing fee
c. import
d. tariff
e. countertrade - Correct Answer- D - tariff
If the Kingdom of Arendelle had total exports of $150 billion and total imports of $234
billion, it had a _______.
a. countertrade
b. comparative advantage
c. absolute advantage
d. balance of payments
e. trade surplus
f. trade deficit - Correct Answer- F - trade deficit
If China were to trade low-cost computer chips to Canada in exchange for wheat, these
countries would execute a(n) _______.
a. auction agreement
b. countertrade agreement
c. strategic transaction
d. licensing agreement
e. free-trade agreement - Correct Answer- B - countertrade agreement
Which of the following functions is not performed by a trading company?
a. Taking title to products
b. Manufacturing products for foreign trading
c. Linking buyers and sellers in different countries
CORRECT Answers
Which of the following is not one of the fundamental assumptions of Adam Smith's
capitalism?
a. Individuals must own private property and the resources used to create wealth.
b. The role of government should be limited to providing defense against foreign enemies,
ensuring internal order, and furnishing public works and education.
c. Economic freedom ensures the existence of competitive markets that allow both sellers and
buyers to enter and leave the market as they choose.
d. The key industries are owned and controlled by the government. - Correct Answer- D - The
key industries are owned and controlled by the government.
When Delta Air Lines, American Airlines, and a few other firms dominate the U.S. airline
industry, this is an example of _______.
a. pure competition
b. monopolistic competition
c. oligopoly
d. monopoly
e. natural monopoly - Correct Answer- C - oligopoly
Which of the following is the Federal Reserve applying when it lowers the interest rate
charged to banks on short-term loans?
a. Monetary policy
b. National debt
c. Inflation
d. Fiscal policy
e. Competition export duty - Correct Answer- A - monetary policy
When the United States levies a tax on textiles from Cambodia, this tax is a type of _______.
, a. export duty
b. licensing fee
c. import
d. tariff
e. countertrade - Correct Answer- D - tariff
If the Kingdom of Arendelle had total exports of $150 billion and total imports of $234
billion, it had a _______.
a. countertrade
b. comparative advantage
c. absolute advantage
d. balance of payments
e. trade surplus
f. trade deficit - Correct Answer- F - trade deficit
If China were to trade low-cost computer chips to Canada in exchange for wheat, these
countries would execute a(n) _______.
a. auction agreement
b. countertrade agreement
c. strategic transaction
d. licensing agreement
e. free-trade agreement - Correct Answer- B - countertrade agreement
Which of the following functions is not performed by a trading company?
a. Taking title to products
b. Manufacturing products for foreign trading
c. Linking buyers and sellers in different countries
