This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is a want? A) A person. B) Something you would like to have but don't need to live. C) Purple. D) Something you need to live. Show Answer Correct Answer: B) Something you would like to have but don't need to live. 2. The calculation of a country's balance of trade involves the value of its A) Exports and imports. B) Net exports and gross domestic product. C) Foreign exchange rate and discount rate. D) Foreign investments and investments by foreigners. Show Answer Correct Answer: A) Exports and imports. 3. Country "A" can produce 12 cars or 8 computers. Country "B" can produce 15 cars or 5 computers. Which country has the absolute advantage in terms of computers? A) Country "A". B) Country "B". C) Neither. D) Both. Show Answer Correct Answer: A) Country "A". 4. What position does Venezuela rank in terms of oil exports? A) 5th. B) 3rd. C) 1st. D) None of above. Show Answer Correct Answer: A) 5th. 5. The actual amount of goods and services that can be bought with a given unit of money A) Parity. B) Purchasing power. C) Exchange rate. D) Open market operations. Show Answer Correct Answer: B) Purchasing power. 6. Which of the following is an advantage of a fixed exchange rate system: A) Improved trade relations. B) Increased flexibility of monetary policy. C) Increased certainty for stakeholders (higher investment). D) None of above. Show Answer Correct Answer: C) Increased certainty for stakeholders (higher investment). 7. Limits the quantity of a good imported into a country. A) Quota. B) Standards. C) Tariff. D) Embargo. Show Answer Correct Answer: A) Quota. 8. This is the most restrictive of the trade restrictions a nation can use to close off all importation of a product. A) Tariff. B) Quota. C) Subsidy. D) Embargo. Show Answer Correct Answer: D) Embargo. 9. The value of its exports minus the value of its imports for measurable during a specific time A) Balance of imports. B) Balance of exports. C) Balance of trade. D) None of above. Show Answer Correct Answer: C) Balance of trade. 10. Government policy about exports and imports is called A) Commercial policy. B) Fiscal policy. C) Monetary policy. D) Fiscal policy. Show Answer Correct Answer: A) Commercial policy. 11. Which country has an absolute advantage in cloth? A) U.S. B) U.K. Show Answer Correct Answer: B) U.K. 12. Of the many arguments in favor of tariffs, the one that has enjoyed the most significant economic justification has been the A) Infant industry argument. B) Cheap foreign labor argument. C) Balance of payments argument. D) Domestic living standard argument. Show Answer Correct Answer: A) Infant industry argument. 13. An international organization of European countries formed to reduce trade barriers and increase cooperation among its members A) European Union. B) European Cooperation. C) Association of European Countries. D) European Confederation. Show Answer Correct Answer: A) European Union. 14. International trade without government restrictions. A) Imports. B) Embargo. C) Trade barriers. D) Free trade. Show Answer Correct Answer: D) Free trade. 15. The difference in value between a country's imports and exports is its ..... A) Quota. B) Trading block. C) Appreciation. D) Balance of trade. Show Answer Correct Answer: D) Balance of trade. 16. A main advantage of specialization results from A) Economics of large scale production. B) The specializing country behaving as a monopoly. C) Smaller production runs resulting in lower unit costs. D) High wages paid to foreign workers. Show Answer Correct Answer: A) Economics of large scale production. 17. The principal objective of WTO is to: A) Reduce the level of all tariffs and encourage trade. B) To increase tariffs on all imported goods. C) Prevent the trading of services across nations' borders. D) Encourage countries to establish quotas. Show Answer Correct Answer: A) Reduce the level of all tariffs and encourage trade. 18. Who gave the income trade terms? A) Tossing. B) Dorrance (Dorrance). C) Jacob Weiner (Jacob Weiner). D) Robertson (Robertson). Show Answer Correct Answer: B) Dorrance (Dorrance). 19. The payments that the government gives to certain industries to provide financial help are known as a(n) A) Embargo. B) Quota. C) Tariff. D) Subsidy. Show Answer Correct Answer: D) Subsidy. 20. What are reasons for trade imbalances between countries? (I)(Several answers may be correct.) A) Different population size. B) Different prices of single goods. C) Overvaluation of a country's currency. D) Different climate conditions. Show Answer Correct Answer: C) Overvaluation of a country's currency. ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 3International Economics Quiz 4International Economics Quiz 5International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9International Economics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books