Asterisk (*) indicates correct answer.

1. Which of the following does the President do when making foreign policy?
   A. Declares war
   B. Applies economic pressure*
   C. Ratifies treaties
   D. Confirms ambassadors
   
   
2. World production is greater when
   A. countries pass tariffs to limit imports.
   B. nations specialize in products they can produce most efficiently.*
   C. countries form cooperatives to prevent competition.
   D. nations slow production of certain products in order to create a higher demand.
   
   
3. The principle that countries should primarily produce goods they can generate at a relatively low cost and purchase goods they cannot is known as
   A. supply and demand policy.
   B. trade interdependence.
   C. comparative advantage.*
   D. national fiscal policy.
   
   
4. A government where powers are shared between the levels of government is known as
   A. Federal system.*
   B. Unitary system.
   C. Parliamentary system.
   D. Oligarchical system.
   
   
5. A government that places unlimited power in one person or a small group is
   A. a democracy.
   B. authoritarian.*
   C. a republic.
   D. unitarian.