THE CONTEMPORARY WORLD QUIZ 2
THE GLOBAL ECONOMY
INSTRUCTIONS: Read and answer the following items carefully. Shade the letter of the
correct answer in your ZipGrade answer sheet.
1. What does economic globalization refer
to primarily?
a. The independence of world economies
b. The increasing interdependence of world
economies
c. The isolation of individual economies
d. The decrease in cross-border trade
2. According to the International
Monetary Fund, what does economic
globalization result from?
a. Technological regression
b. Human innovation and technological
progress
c. Decrease in international trade
d. Stagnant capital flow
3. Which of the following is NOT a
driving force for economic globalization?
a. Rapid growth of information in productive
activities
b. Marketization restructuring process
c. Increase in state subsidies
d. Organizational restructuring of
management
4. When did the origin of modernity and
globalization through long-distance trade
occur?
a. 16th century
b. 17th century
c. 18th century
d. 19th century
5. What was the purpose of the Bretton
Woods system created in 1944?
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a. Ensure a monetary stability for all nations
b. Promote regional conflicts
c. Increase trade barriers
d. Discourage economic cooperation
6. What was the main function of the
European Monetary System (EMS)
established in 1979?
a. Stabilize exchange rates between
European countries
b. Increase international trade regulations
c. Reduce technological advancements
d. Encourage gold standard system
7. What is the goal of the European
Financial Stability Mechanism (EFSM)?
a. Raise money through financial markets
b. Ensure safety and quality standards of
imported products
c. Provide emergency assistance to EU
member states
d. Establish tariffs on imported goods
8. What is the main purpose of
international trade?
a. Limit competition
b. Increase domestic supply
c. Exchange of goods, services, and capital
across borders
d. Decrease GDP of countries
9. What does specialization in
international trade refer to?
a. Trading the same goods with various
countries
b. Focusing on producing a wide range of
goods
c. Efficiently producing the same item for
domestic use
d. Trading with other countries for goods it
can't efficiently produce
10. Which type of trade policy imposes
taxes on imported and exported goods?
a. Tariffs
b. Trade barriers
c. Safety standards
d. National trade policy
11. Who deals with the global rules of
trade between nations?
a. World Bank
b. WTO
c. IMF
d. OECD
12. What is one of the determining factors
for the location of outsourcing?
a. Technology for search
b. Bilateral trade policies
c. Use of gold reserves
d. International trade regulations
13. What type of system uses gold reserves
to back a country's currency?
a. Bretton Woods system
b. Gold Standard
c. EMS
d. EFSM
14. What is the aim of the European
Monetary Union (EMU)?
a. Establish a common currency called the
euro
b. Increase exchange rate fluctuations
c. Promote individual Member States'
policies
d. Reduce global economic stability
15. What are the major driving forces for
economic globalization?
a. Science and technologies
b. Marketization and reduction of state
subsidies
c. Production chains and gold standard
d. Investment in infrastructure
16. How do trade policies contribute to
boosting a nation's international trade?
a. Impose heavy tariffs on imported goods
b. Introduce trade barriers for local
industries
c. Define standards, rules, and regulations
d. Increase the cost of services
17. What does the World Trade
Organization (WTO) focus on?
a. Ensuring smooth, predictable, and free
trade flow
b. Setting national trade policies
c. Regulating financial markets
d. Providing assistance to unstable
economies
18. What is the goal of the EMS and the
EURO in relation to stabilizing
economies?
a. Increase inflation
b. Stabilize exchange rates
c. Create trade barriers
d. Decrease financial assistance
19. What is the primary determinant of
the extent of international outsourcing?
a. Subcontracting strategies
b. Thickness of domestic and foreign
markets
c. Technological advancements
d. Contracting environments

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20. Which global event led to drastic
changes in global trade policies in the 21st
century?
a. The European Stability Mechanism
b. The Bretton Woods system collapse
c. The Great Depression
d. The global financial crisis

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Answer Key
1. b. The increasing interdependence of world economies
2. b. Human innovation and technological progress
3. c. Increase in state subsidies
4. a. 16th century
5. a. Ensure a monetary stability for all nations
6. a. Stabilize exchange rates between European countries
7. c. Provide emergency assistance to EU member states
8. c. Exchange of goods, services, and capital across borders
9. d. Trading with other countries for goods it can't efficiently produce
10. a. Tariffs
11. b. WTO
12. a. Technology for search
13. b. Gold Standard
14. a. Establish a common currency called the euro
15. a. Science and technologies
16. c. Define standards, rules, and regulations
17. a. Ensuring smooth, predictable, and free trade flow
18. b. Stabilize exchange rates
19. b. Thickness of domestic and foreign markets
20. d. The global financial crisis

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