1. Middle East Government and Economics Test Study Guide

2. What are the three main questions that economic systems answer?
(1)What to produce
(2) how to produce
(3) for whom to produce.

3. How are the economic questions answered in a market economy?
Economic decisions made by individuals who decide what to produce and what to buy.

4. How are the economic questions answered in a traditional economy?
Most economic decisions made based on customs and habits of how decisions were made in the past.

5. How are the economic questions answered in a command economy?
Government planning groups decide and also decide what jobs workers will do.

6. Explain why most countries are considered to have mixed economies.
They have some individual freedoms to operate in business and the government has some control (regulations)

7. Who controls the government in an oligarchy?
A political party or small group

8. In which government type do the citizens have no rights?
Autocratic

9. In which government type do the citizens have very few rights?
Oligarchic

10. In which government type do the citizens have rights and freedoms that are protected by laws?
Democratic

11. Where is the power held in a unitary government?
The Central government

12. Where is the power held in a confederation government?
The Regional authority or government

13. What is an entrepreneur?
A person who takes risks to start a business.

14. In which economic system would you be more likely to become one?
Market

15. Where is the power held in federal system of government?
It is shared among different levels of governments (shared between central and local or regional governments).

16. What is specialization?
Producing goods or providing services which you do best and that are in demand on the world market

17. Why is specialization important?
No country can produce everything it needs so it must focus on what it does best and participate in trade to get things they can’t produce.

18. What is a tariff, and what is its purpose?
A tax on goods when they are imported.
Purpose: to make imported item more expensive than similar item made locally

19. What is an embargo, and what is its purpose?
A temporary halt on trade; used when a nation wants to get another nation to do what they want politically

20. A limit on the amount of foreign goods allowed into a country
What is a quota?
A limit on the amount of foreign goods allowed into a country

21. Human capital or Human Resource
What is the knowledge and skills people have that makes it possible to produce a good or provide a service?
Human capital or
Human Resource

22. Gross Domestic Product (GDP)
What is the total value of all goods and services produced by a country in a given year?
Gross Domestic Product (GDP)

23. How do you determine the per capita GDP?
It is determined by dividing the GDP of a nation by its population.

24. Which is more accurate in helping to determine the standard of living in a nation? (GDP or GDP per capita)
GDP per capita

25. Who is the head of a parliamentary democracy?
Prime Minister

26. Who is the head of a presidential democracy?

27. Which is elected by the citizens in a separate election from that of the legislature? (President or Prime Minister)
President

28. Which is elected as a legislator by the people and then chosen as the head of government by the legislative body? (President or Prime Minister)
Prime Minister

29. Which type of government does Israel have?
Parliamentary Democracy

30. What type of government does Iran have?
Theocratic Republic

31. What type of government does Saudi Arabia have?
Hereditary Monarchy

32. Who influences most of the laws in Israel?
Orthodox Jews

33. Most of Saudi Arabia’s laws are based on what?
The Quran

34. In which nation are religious leaders, known as Shia clerics, allowed to make political decisions?
Iran

35. Who makes the political decisions in Saudi Arabia?
The King

36. What is Sharia Law and which country uses it?
Laws based on the Quran; Saudi Arabia

37. Describe oil as it relates to Israel’s economy.
It produces very little oil, but its industrialized economy depends on it.

38. Name the main industries in which Israel’s citizens’ work.
Medical technology, agricultural technology, mining, and electronics industries

39. What are petrochemicals?
Products made from petroleum

40. About how much of the money raised by Iran’s government comes from the sale of oil and petrochemicals?
About 85%

41. Know and be able to tell all of the improvements Saudi Arabia has been able to do as a result of selling oil on the world market.
Saudi Arabia able to spend billions on irrigation and desalinization technology which helps improve agricultural industry
Cities built in areas once remote deserts
Modernized roads, schools, airports, and communication systems

42. Why is it important for Saudi Arabia to invest in its human capital?
The technology involved in the oil industry is complicated and requires a well-educated workforce.

43. Know the main industries in which Israel, Saudi Arabia, and Iran have invested.
Iran---Oil production, technology, communication systems, and technology for military defense
Saudi Arabia--- Oil production, transportation, and communication systems
Israel---Agricultural technology, medical technology, electronics, mining, and advanced communications systems. (Also technology for military defense)