This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 22 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The global financial crisis of 2008-2009 temporarily slowed down globalization's progress. A) True. B) False. Show Answer Correct Answer: A) True. 2. An example of a Common Market A) NAFTA. B) EU. C) ANZAC. D) CARICOM. Show Answer Correct Answer: D) CARICOM. 3. Which trade theory contends that a country that initially develops and exports a new product may eventually become an importer of it, and may no longer manufacture the product: A) Theory of factor endowments. B) Theory of overlapping demands. C) Economies of scale theory. D) Product life cycle theory. Show Answer Correct Answer: D) Product life cycle theory. 4. In international trade there is no restriction to movement of goods and services A) True. B) False. Show Answer Correct Answer: B) False. 5. Which of the following best describes Division of labour? A) Breaking down of work into smaller units. B) Doing variety if diversified work. C) Each worker creates the final product. D) None of above. Show Answer Correct Answer: A) Breaking down of work into smaller units. 6. An economy with foreign trade is known as ..... A) A laissez faire economy. B) An open economy. C) A close economy. D) A planned economy. Show Answer Correct Answer: B) An open economy. 7. Absolute advantages refer to a country stability to produce more of the product than another country can, with the same amount of resources. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 8. What is the difference between a fixed rate exchange system and a floating rate system? A) Government sets rate vs market sets rate. B) Doesn't exist vs does exist. C) Never changing vs always changing. D) Currency never appreciates vs can appreciate. Show Answer Correct Answer: A) Government sets rate vs market sets rate. 9. Deficits in balance of payments can be solved by ..... A) Increasing government spending. B) Lowering interest rates. C) Raising indirect taxes. D) Discouraging import. Show Answer Correct Answer: D) Discouraging import. 10. What is "Engaging in trade without barriers; most efficient" ? A) Protectionism. B) Free Trade. C) Absolute Advantage. D) International trade. Show Answer Correct Answer: B) Free Trade. 11. The value of one currency expressed in terms of another is known as the ..... A) Internal Funds. B) External Funds. C) Development. D) Exchange Rate. Show Answer Correct Answer: D) Exchange Rate. 12. All exchange transactions take place at the fixed exchange rate A) True. B) False. Show Answer Correct Answer: A) True. 13. Reducing inflation problem is a reason for protecting domestic industries from foreign competition. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 14. Suppose that the domestic government allows a specific number of goods to be imported each year, but it does not specify from where the product is shipped or who is permitted to import. Such a trade barrier is known as A) An import tariff. B) A tariff-rate quota. C) A selective quota. D) A global quota. Show Answer Correct Answer: D) A global quota. 15. Which has more to do with opportunity cost? A) Absolute advantage. B) Comparative advantage. Show Answer Correct Answer: B) Comparative advantage. 16. In 1962, the United States prohibited all imports and exports to and from Cuba. A) Tariff. B) Embargo. C) Quota. D) None of above. Show Answer Correct Answer: B) Embargo. 17. Refers to free trade agreements among countries in a region (ex:EU, ASEAN, and NAFTA). A) Free Trade. B) Trade. C) Balance of Trade. D) Trading Bloc. Show Answer Correct Answer: D) Trading Bloc. 18. Pick the factors affecting terms of trade A) Terms of trade. B) Tariff and Devaluation. Show Answer Correct Answer: B) Tariff and Devaluation. 19. What is meant by the law of comparative advantage? A) The ability of an economy to produce a particular good or service at a lower opportunity cost than its trading partners. B) The ability of an economy to produce a particular good or service at a higher opportunity cost than its trading partners. C) The ability of an economy to produce a particular good or service at the same opportunity cost as its trading partners. D) The ability of an economy to produce all types of goods or services at the same opportunity cost as its trading partners. E) The ability of an economy to produce any type of good or service at a lower opportunity cost than its trading partners. Show Answer Correct Answer: A) The ability of an economy to produce a particular good or service at a lower opportunity cost than its trading partners. 20. It simply means that the country can produce more of a good than another country A) Trade Surplus. B) Trade Deficit. C) Comparative Advantage. D) Absolute Advantage. Show Answer Correct Answer: D) Absolute Advantage. ← 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