This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A problem with a fixed exchange rate is that if it is set too low A) It will slow exports. B) It will reduce imports. C) It will increase the level of debt a government must pay back. D) It will force up interest rates. Show Answer Correct Answer: C) It will increase the level of debt a government must pay back. 2. The specifications that products must meet for various purposes such as health, safety or compliance are called? A) Standard. B) Embargo. C) Rates. D) License. Show Answer Correct Answer: A) Standard. 3. When a currency loses value, we say it has A) Depreciated. B) Appreciated. C) Exchanged. D) Gotten stronger. Show Answer Correct Answer: A) Depreciated. 4. An agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. A) NAFTA. B) ASEAN. C) EU. D) None of above. Show Answer Correct Answer: A) NAFTA. 5. Turkey trades textiles, food products, and building materials to Germany in exchange for German machinery, technology, and cars. This trade is possible because A) Neither country has an absolute advantage in any good. B) Each country has comparative advantage in different goods. C) The countries are forced to trade with each other. D) Both countries share comparative advantage in the same goods. Show Answer Correct Answer: B) Each country has comparative advantage in different goods. 6. Which of the following is NOT a Criticism of Adam Smith's Theory of International Trade: A) It assumes that each exporting country has an absolute cast advantage in the production of a specific commodity. B) It failed to explore in any comprehensive manner the factors influencing trade between two or more countries. C) It was too elementary. D) Backward countries do not sell their surplus produce in foreign markets but are constrained to export despite domestic shortages. Show Answer Correct Answer: C) It was too elementary. 7. The current account in the balance of payment consists of ..... ? A) Good and service account and current transfer. B) Current transfer, direct investment and portfolio investment. C) Goods and service account, income account and current transfer. D) Income, current transfer, other investment and errors and omissions. Show Answer Correct Answer: B) Current transfer, direct investment and portfolio investment. 8. Completely ban trade with a country usually due to political disputes A) Quota. B) Subsidy. C) Embargo. D) None of above. Show Answer Correct Answer: C) Embargo. 9. Absolute advantage is determined by: A) Actual differences in labor productivity between countries. B) Relative differences in labor productivity between countries. C) Both (a) and (b). D) Neither (a) nor (b). Show Answer Correct Answer: A) Actual differences in labor productivity between countries. 10. Which of the following is referring to International Trade? A) Exchange of export and import between the people of two countries. B) Exchange of goods and services between the people of two countries. C) Exchange of export and import within the political boundaries of a country. D) Exchange of goods and services within the political boundaries of a country. Show Answer Correct Answer: B) Exchange of goods and services between the people of two countries. 11. Embargoes: A) Ban trade with other countries. B) Generate tax revenues for that country. C) Hurt domestic producers. D) Lower prices of goods. Show Answer Correct Answer: A) Ban trade with other countries. 12. Quotas are not popular with consumers because they limit consumer choice. This makes products more expensive. A) False. B) True. Show Answer Correct Answer: B) True. 13. A current account deficit A) Means uk goods and services are less competitive on international markets. B) Reflects rising demand for Uk made goods and services. C) Can lead to a rise in the value of the £ over time. D) None of above. Show Answer Correct Answer: A) Means uk goods and services are less competitive on international markets. 14. The main benefit of free trade between two countries is that A) Income distribution in each country will become more equitable. B) Employment in each country will increase. C) Migration from one country to the other will increase. D) Each country can consume beyond its constraints of resources and productivity. E) Each country will become more self-sufficient. Show Answer Correct Answer: D) Each country can consume beyond its constraints of resources and productivity. 15. When individuals work for businesses, what resource are they providing? A) Capital. B) Labor. C) Loans. D) Raw materials. Show Answer Correct Answer: B) Labor. 16. WTO has observed governments A) 25. B) 11. C) 32. D) 09. Show Answer Correct Answer: A) 25. 17. Refers to the price of one country's currency express in terms of another country's currency. A) Quota. B) Tariff. C) Exchange Rates. D) NAFTA. Show Answer Correct Answer: C) Exchange Rates. 18. A decrease in the demand for US goods will do what to the value of the US dollar? A) Depreciate the value of our money. B) Appreciate the vale of our money. Show Answer Correct Answer: A) Depreciate the value of our money. 19. Another name for the difference between the value of a country's imports and exports A) Trade Weighted Value of a Dollar. B) Flexible Rate of Exchange. C) Foreign Exchange Rate. D) Balance of Trade. Show Answer Correct Answer: D) Balance of Trade. 20. Who advocated the theory of comparative cost advantage doctrine of international trade? A) Adam Smith. B) David Ricardo. C) Alfred Marshal. D) J.M. Keynes. Show Answer Correct Answer: B) David Ricardo. ← 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