True/False
a system of government controlled trade; not a system of free trade
mercantilism
In the 1800s, worldwide demand for cotton increased. Plantations in the South began growing more cotton to meet the demand from Northern textile mills. The textile mills processed the raw cotton and sent it to markets around the world.
According to the text, what was the effect of increasing worldwide demand for cotton on regions in the United States?
A) The regions invested money in new resources other than cotton.
B) The regions eliminated jobs in planting and manufacturing.
C) The regions became more independent and self-sufficient.
D) The regions became more dependent on each other.
D) The regions became more dependent on each other.
In the 1800s, factories adopted a new method to make items that were exactly alike. This became the basis for mass production. Mass production allowed factories to produce goods more quickly and at a lower cost than ever before.
According to the text, how did mass production affect the economic growth of America during the 1800s?
A) Fewer goods were produced, and businesses earned less money.
B) More goods were produced, and businesses earned less money.
C) More goods were produced, and businesses earned more money.
D) Fewer goods were produced, and businesses earned more money.
C) More goods were produced, and businesses earned more money.
A person has to pay to take the bus to work every day. Why is developing a budget important for this person?
A) It ensures that the person has enough money for the bus fare.
B) It helps the person find the fastest route to work every day.
C) It enables the person to quit the job and find new work.
D) It allows the person to spend less money on bus fare.
A) It ensures that the person has enough money for the bus fare.
Hazel has $20. She would like to buy a $20 video game and a $20 shirt. Hazel's friend offers to loan her $20 to purchase both items, but the friend will charge her interest of $1 per week. Hazel will be able to return the money to her friend within six weeks.
Based on the provided information, to what extent is borrowing money from a friend beneficial to Hazel?
A) To no extent—Hazel will owe her friend more money than the total cost of the video game and the shirt.
B) To a slight extent—Hazel will be able to buy either only the video game or only the shirt.
C) To a moderate extent—Hazel will be able to buy both the video game and the shirt.
D) To a great extent—Hazel will pay less money for the video game and the shirt than if she had continued to save.
C) To a moderate extent—Hazel will be able to buy both the video game and the shirt.
when a nation or individual concentrates is productive efforts producing a limited variety of goods; It oftentimes has to forgo producing other goods & relies on obtaining other goods through trade
specialization
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After arriving in North America, early settlers grew the crops they needed. Goods that could not be grown or made in the colonies had to be imported. Eventually, colonists began growing crops for the purpose of trading them with other countries. Colonists also exported furs and lumber to Europe.
Based on the text, why was international trade important to North American settlers during colonization?
A) Colonists traded raw materials for needed imports to ensure their own survival.
B) Colonists needed raw materials from Europe for manufacturing in the colonies.
C) Colonists needed food imported from Europe because of the bad soil in the colonies.
D) Colonists made large profits from exporting goods, but did not need to import items.
A) Colonists traded raw materials for needed imports to ensure their own survival.
How does technology affect the economy of the United States?
A) It encourages growth because it increases the speed of communication and production of goods in business.
B) It discourages growth because it encourages companies to offer jobs that are less specialized and pay higher wages.
C) It discourages growth because it prevents companies from selling their products abroad.
D) It encourages growth because it provides businesses a way to avoid government regulations.
A) It encourages growth because it increases the speed of communication and production of goods in business.
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During the era of westward expansion, the Smith family wanted to move from North Carolina to settle on the frontier. In order to save enough money to purchase the goods needed for their long wagon journey westward, they made a family budget. For example, the family had to decide to purchase a barrel of flour in the months before their journey instead of a new banjo.
Based on the text, how did creating a budget help the Smith family?
A) It helped them decide on the route they would take on their journey.
B) It helped them to set aside money for supplies for their trip.
C) It helped them determine what goods they would need during their journey.
D) It made it possible to buy the goods they were taking west with credit.
B) It helped them to set aside money for supplies for their trip.
Why should I try to save money?
You might need money for an emergency. You also might need to buy something more expensive, like a car. Saving money might help you buy a car, put a security deposit on an apartment, or pay for something else expensive.
Based on the text, to what extent does saving money support a person’s goal to be well prepared for unexpected expenses?
A) To no extent—Savings do not help a person have extra money.
B) To a slight extent—Savings can help a person avoid paying a security deposit.
C) To a moderate extent—Savings can help a person be ready for an emergency.
D) To an extreme extent—Savings can help a person earn more money at work.
C) To a moderate extent—Savings can help a person be ready for an emergency.
a plan for making and spending money
budget
During the early colonial period, people lived primarily on small farms and were self-sufficient. In the few small cities and among the larger plantations of North Carolina, South Carolina, and Virginia, some needed items and virtually all luxuries were imported in return for tobacco, rice, and indigo (blue dye) exports.
Based on the information, which statement best summarizes international trade in the North Carolina, South Carolina, and Virginia colonies?
A) The colonies were completely self-sufficient and traded only among themselves.
B) The colonies had many cities that produced manufactured goods for export to Europe.
C) The colonies exported raw materials and imported items they could not produce for themselves.
D) The colonies exported manufactured goods in exchange for food not available on American farms.
C) The colonies exported raw materials and imported items they could not produce for themselves.
How did division of labor affect economic development?
A) People could purchase fewer types of goods.
B) Businesses could make products more quickly.
C) Individuals learned a wider variety of skills.
D) Workers became owners of the factories.
B) Businesses could make products more quickly.
How does creating a budget benefit an individual?
A) It allows the individual to get a better job.
B) It enables the individual to earn more money.
C) It allows the individual to open a savings account.
D) It helps the individual to understand everyday spending habits.
D) It helps the individual to understand everyday spending habits.
Juan earns a salary of $3,000 per month. He is able to pay all of his bills and has leftover money to save. He puts $300 of this money into his retirement account.
To what extent does Juan’s decision to save money each month affect his quality of life?
A) It has no impact on his quality of life because it does not affect his current or future spending
B) It has a limited impact on his quality of life because he has more money to spend on current daily needs.
C) It has a moderate impact on his quality of life because he should have some income when he retires.
D) It has a great impact on his quality of life because he cannot afford to meet his monthly expenses.
C) It has a moderate impact on his quality of life because he should have some income when he retires.
the most desirable alternative given up as a result of a decision
opportunity cost
Because of the cold weather in Russia, farmers there cannot grow apples. The demand for apples in Russia is high, so Russia gets them by trading with nations that can grow apples, like the United States.
Based on the above example, why do countries trade goods with each other?
A) Countries export surplus goods that they do not want or need.
B) Countries trade goods to have more choices of the same products.
C) Countries trade goods so they can get products not available in their own country.
D) Countries import goods so they can see how they are made and get ideas for new products.
C) Countries trade goods so they can get products not available in their own country.
Division of labor is the concept of assigning specific tasks to people in a workplace. It allows for products to be produced more quickly. As a result, the products can be sold at lower prices.
Based on the information, how has division of labor affected the economy of the United States?
A) The economy has grown because products have become cheaper for consumers.
B) The economy has declined because items have been created more slowly.
C) The economy has declined because workers have earned more pay.
D) The economy has grown because costs have increased for businesses.
A) The economy has grown because products have become cheaper for consumers.
Henry is working small jobs in order to save money to buy a car in two years. Henry has just opened a savings account at a local bank.
Using this information, which statement explains the importance of Henry following a budget for the next two years?
A) It will help him earn more money for fewer hours worked.
B) It will help him track income, expenses, and savings.
C) It will help him get a car loan in two years for a more expensive car.
D) It will help him to spend money on luxury items rather than needs.
B) It will help him track income, expenses, and savings.
Carly is 18 years old and has just graduated from high school. She got her first job when she was 16 and has been saving at least $50 every month since then. She now has $3,000 in her savings account. She plans to purchase a car. A local car dealership has used cars that cost between $2,000 and $3,000, while new cars cost approximately $15,000.
To what extent will Carly’s savings benefit her when she purchases a car?
A) To no extent—Carly has not saved enough money to purchase a car using only her savings.
B) To a limited extent—Carly will be able to rent a car, but cannot purchase one using only her savings.
C) To a moderate extent—Carly has saved enough for a used car, but cannot purchase a new car using only her savings.
D) To an extreme extent—Carly will be able to purchase a new car using only her savings.
C) To a moderate extent—Carly has saved enough for a used car, but cannot purchase a new car using only her savings.
an arrangement to receive cash, goods or services now and pay for them in the future
credit
Below is an excerpt from an 1833 treaty between the United States and Siam:
The Citizens of the United States shall have free liberty to enter all the Ports of the Kingdom of Siam, with their cargoes, of whatever kind the said cargoes may consist; . . . the Trade shall be free on both sides to sell, or buy, or exchange, on the terms and for the prices the owners may think fit.
Based on the excerpt, what was the main reason for the treaty between the United States and Siam?
A) to restrict each country to limited trade with each other
B) to pledge loyalty to each other during times of war
C) to agree to free trade between the two countries
D) to allow tourists to travel to each of the countries
C) to agree to free trade between the two countries
The owner of a company that makes wheels decides to use division of labor by assigning each worker a specific task to perform so that all of the workers contribute to the production of each wheel. As a result, the wheels are built three times as quickly, and the factory can make more wheels.
Based on this example, how does division of labor contribute to economic growth?
A) It requires business owners to pay their workers higher wages.
B) It allows a larger number of goods to be produced at a greater rate.
C) It ensures that better quality goods are produced and available to consumers.
D) It increases the demand for new types of products and leads to new technology.
B) It allows a larger number of goods to be produced at a greater rate.
During the Panic of 1819, many people lost money. People had difficulty paying for items they needed and had to conserve food and other resources to survive. If necessary, people lived without their basic needs. Creating a budget was a crucial part of survival for many people.
Based on the text, why was a budget an important part of living during the Panic of 1819?
A) People did not know how to grow their own food.
B) Money and resources were scarce for many people.
C) The government had extra money to give to people.
D) People did not use money and relied on barter and trade.
B) Money and resources were scarce for many people.
Borrowing money to purchase items or pay bills comes with an extra cost that paying with cash does not. When purchasing with cash, consumers spend only what they have readily available. Borrowing money involves paying interest on the amount of money borrowed.
Why can paying with cash be more beneficial to a person than borrowing money?
A) Interest is charged when money is borrowed.
B) Purchasing with cash limits a person’s ability to spend.
C) Borrowing money is easier than earning cash.
D) Borrowing money increases a person’s credit.
A) Interest is charged when money is borrowed.