The United States is the globe’s largest market, responsible for trillions of dollars in trade and investment around the world each year. But how does our role in the global economy affect you? What about people in other countries?
Learn more about jobs in other countries in the quiz below.
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Find out how much the dollar is worth overseas and test your knowledge of the worlds markets.
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When companies hire workers in other countries to replace domestic workers, what is it called?
Hiring cheaper workers abroad to do the jobs of more expensive U.S. workers is commonly known as both outsourcing and offshoring. Advocates say it saves money for companies and allows them to expand, creating more jobs overall in the long run. Critics say it takes jobs away from people who need them, and helps only the companies, and that any new job creation would take too long to offset the pain of job losses.
If you want to pick up an iPhone in Paris, it will cost you:
Buying an iPhone in France would set you back about $570.
What is inflation?
Generally, inflation is a rise in prices and a decrease in purchasing power. When there is high inflation, prices go up quickly, meaning your money today won’t buy as much tomorrow. Low levels of inflation aren’t harmful to the economy. But when inflation is very high, people save less and don’t invest.
Whats the basic law of economics that sets prices for anything you might buy or sell?
The law of supply and demand says that prices are set wherever demand and supply meet. For example, suppliers of music CDs might want to charge $30 per CD, but consumers dont want CDs badly enough to pay that much. If the demand for CDs went up, then prices would go up accordingly.
When the government spends less money than it brings in, its left with a(n):
The extra money left over when government spends less than it brought in is known as a surplus. In business circles, that would be considered a net profit. Among the things governments can choose to do with surplus funds are, pay off debt, spend on programs or even give taxpayers some money back.
To get your hands on a DVD in London, you would have to shell out about:
A DVD is gonna cost around $25 in the United Kingdom.
Whats the total output of the U.S. economy called?
The Gross National Product, or GNP, is the total value of all goods and services produced in the country within a year. Gross Domestic Product, or GDP, is closely related but doesnt include money made from overseas investments. The GNP is usually tracked closely by governments as a measure of how a countrys economy is doing. Generally, the higher the GNP, the better the economy.
What organization oversees global trade between countries?
The WTO, or World Trade Organization, oversees trade agreements among 147 member nations. The WTO deals with the rules of trade while the IMF, or International Monetary Fund, is an international organization that focuses more on the international monetary system. OPEC is a group of oil-producing countries, and the World Bank is an international institution that lends money to countries.
A new CD costs nearly $20 in Rome.
At $20, you would have to pay nearly twice as much for a CD overseas.
What is globalization?
Generally, globalization is defined as the growth of economic activity going beyond national borders. Basically, it’s the easy movement of people, goods and services from one country to another. It’s how a company based in the United States can take raw materials from Mexico and produce a finished product in China. Prior to the growth of globalization, it was more difficult for companies to do that.
When actual spending goes beyond what is brought in, its called a(n):
When governments (local, state or federal levels) spend more than what they bring in from taxes and other sources of revenue, the difference is called a deficit. Deficits are measured on a year-to-year basis, and the governments debt is the sum of all deficits (minus any surpluses), as the government must borrow money to cover any shortfalls.
When there is only one supplier of a particular product or service, what do you have?
A monopoly means no competitors are offering the same product or service. The sole supplier dominates the market and can set the price for the good or service, which usually leads to higher prices. That’s why competition among companies is considered good for consumers, because it brings prices down.
A meal at a European fast-food joint would set you back almost $7.
A Whopper meal at an European Burger King costs almost $7.
How do countries try to protect domestic production of certain products, when imported products might be cheaper?
When countries attempt to protect their domestic products, they may impose trade barriers such as tariffs, a type of tax, on imports that compete with their own country’s goods. This usually keeps prices higher for consumers. Countries can also impose bans on importing certain products or enter into trade blocs with other countries that ban products from countries outside the agreement.