This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The principal benefit of tariff protection goes to: A) Domestic consumers of the good produced. B) Domestic producers of the good produced. C) Foreign producers of the good produced. D) Foreign consumers of the good produced. Show Answer Correct Answer: B) Domestic producers of the good produced. 2. The theory of relative advantage is A) It is in their interests to help countries increase exports and limit imports. B) Specialization in the production of goods that have achieved the greatest efficiency for the country and export, exchanging them for goods with a minimum advantage of the country. C) He says that the country should consume only what it produces. D) Taxing imports is a means of creating jobs and increasing the country's income. Show Answer Correct Answer: B) Specialization in the production of goods that have achieved the greatest efficiency for the country and export, exchanging them for goods with a minimum advantage of the country. 3. The US bans beef imports from Canada after a Mad Cow Disease outbreak there. This is an example of which type of barrier to trade? A) Standards. B) Quota. C) Subsidy. D) Tariff. Show Answer Correct Answer: A) Standards. 4. A closed economy is one in which: A) Imports exactly equal exports, so that trade is balanced. B) Domestic firms invest in industries overseas. C) The home economy is isolated from foreign trade. D) Saving exactly equals investment at full employment. Show Answer Correct Answer: C) The home economy is isolated from foreign trade. 5. What is "The ability to produce more goods/services than another country" ? A) Absolute Advantage. B) Comparative Advantage. C) Embargo. D) Standards. Show Answer Correct Answer: A) Absolute Advantage. 6. It takes Mrs. Lee 5 hours to quilt a blanket. It takes Mr. Mosley 2 hours to quilt a blanket. A) Mr. Mosley has an absolute advantage in blanket making. B) Mrs. Lee has an absolute advantage in blanket making. C) Mr. Mosley has a comparative advantage in blanket making. D) Mrs. Lee has a comparative advantage in blanket making. Show Answer Correct Answer: A) Mr. Mosley has an absolute advantage in blanket making. 7. If the trade price is higher than the domestic price, then the country will: A) Importing goods from other countries. B) Export goods to other countries. C) Does not carry out international trade. D) Lowering the price of goods in the domestic market. E) Increase the price of goods in the domestic market. Show Answer Correct Answer: B) Export goods to other countries. 8. A subsidy is A) A cash grant or loan from the government to support the business. B) A law that promotes safety. C) A tax on imports. D) A specific number of imports allowed. Show Answer Correct Answer: A) A cash grant or loan from the government to support the business. 9. What countries are involved in NAFTA? A) America, Canada, Mexico. B) Brazil, Mexico, America. C) Mexico, Latin America, America. D) Canada, America, Latin America. Show Answer Correct Answer: A) America, Canada, Mexico. 10. An ..... is a government order that restricts the exchange of goods with a specified country. A) Embargo. B) Tariff. C) Quota. D) Subsidy. Show Answer Correct Answer: A) Embargo. 11. Higher price levels in the UK would result in A) Increased exports and appreciation of the £. B) Increased exports and depreciation of the £. C) Increased imports and an appreciation of the £. D) Increased imports and depreciation of the £. Show Answer Correct Answer: D) Increased imports and depreciation of the £. 12. What is described as a policy in which there is no government regulation and countries may trade as they please? A) Free trade. B) Balance of trade. C) Imports. D) Exports. Show Answer Correct Answer: A) Free trade. 13. A tariff-rate quota A) Is a limit on the number of tariffs that a country can place on imports. B) Uses a single tariff along with import quotas to restrict imports. C) Is designed to avoid the price increases caused by simple tariffs. D) Is a two-tier tariff system intended to restrict imports. Show Answer Correct Answer: D) Is a two-tier tariff system intended to restrict imports. 14. What is "The ability to produce at a lower opportunity cost than another country" ? A) Absolute Advantage. B) Comparative Advantage. C) Quota. D) Subsidy. Show Answer Correct Answer: B) Comparative Advantage. 15. International trade in goods and services is sometimes used as a substitute for all of the following except: A) International movements of capital. B) International movements of labor. C) International movements of technology. D) Domestic production of different goods and services. Show Answer Correct Answer: D) Domestic production of different goods and services. 16. Which of the following policies permits a specific quantity of goods to be imported at tariff rate and applies a higher tariff rate to imports above company? A) Quota. B) Import tariff. C) Specific tariff. D) All of the above. Show Answer Correct Answer: C) Specific tariff. 17. The benefit or advantage of an economy to be able to produce a commodity at a lesser opportunity cost than other entities is referred to as A) Opportunity Cost. B) Absolute Advantage. C) Comparative Advantage. D) Growth. Show Answer Correct Answer: C) Comparative Advantage. 18. The current transfer includes the following items EXCEPT ..... A) Gift. B) Military aid. C) Financial aid. D) Investment. Show Answer Correct Answer: D) Investment. 19. A fixed exchange rate is also known as ..... A) Pegged exchange rate. B) Petty Exchange rate. Show Answer Correct Answer: A) Pegged exchange rate. 20. If a country has a deficit in its current account, there will be a A) Surplus in the financial account (formerly called capital account). B) Surplus in the trade balance. C) Surplus in the balance of payments. D) Deficit in the financial account(formerly called capital account). E) Deficit in the balance of payments. Show Answer Correct Answer: A) Surplus in the financial account (formerly called capital account). ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 3International Economics Quiz 4International Economics Quiz 5International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books