This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Globalization is the economic integration of the world through increased trade, investment, and monetary transactions across international borders. A) True. B) False. Show Answer Correct Answer: A) True. 2. What is the ability to produce a product most efficiently known as? A) Comparative advantage. B) Absolute advantage. C) Division of labor. D) Opportunity cost. Show Answer Correct Answer: A) Comparative advantage. 3. An example of a Free trade area A) NAFTA. B) EU. C) ASEAN. D) CARICOM. Show Answer Correct Answer: A) NAFTA. 4. An individual, firm, or country using the fewest inputs to produce the same amount of output or the individual, firm, or country producing the largest number of units of output given the same productive resources. A) Comparative advantage. B) Infant industries. C) Absolute advantage. D) Balance of trade. Show Answer Correct Answer: C) Absolute advantage. 5. Suppose the exchange rate between the United States and Japan changes from $ 1 = 100 yen to $ 1 = 110 yen. What would happen to the prices of American goods in Japan? A) Increase or decrease. B) Decrease. C) Remain the same. D) Increase. Show Answer Correct Answer: D) Increase. 6. How many main Impacts are there that shape international trade for every nation A) 1. B) 2. C) 3. D) 4. Show Answer Correct Answer: C) 3. 7. Import means A) Buying goods from another country. B) Selling goods to another country. C) Only making one kind of product. D) None of above. Show Answer Correct Answer: A) Buying goods from another country. 8. What do NAFTA, EU, and ASEAN have in common? A) The United States is a member of all three. B) Each group attempts to enforce trade barriers rigidly. C) All three groups use the same currency. D) They are all interested in promoting free trade. Show Answer Correct Answer: D) They are all interested in promoting free trade. 9. Which of the following is not a type of exchange rate? A) Fixed Exchange Rates. B) Floating Exchange Rates. C) Secure Exchange Rates. D) Managed Exchange Rates. Show Answer Correct Answer: C) Secure Exchange Rates. 10. Which of the following is NOT an obstacle to economic development? A) Population Growth. B) Natural Resources / Geography. C) Tariffs / Quotas. D) Corruption / War. Show Answer Correct Answer: B) Natural Resources / Geography. 11. An increase in exports leads to which of the following: A) An increase in demand for the domestic currency. B) A decrease in demand for the domestic currency. C) An increase in the supply of the domestic currency. D) A decrease in the supply of the domestic currency. Show Answer Correct Answer: A) An increase in demand for the domestic currency. 12. A tariff imposed to protect domestic firms from import competition A) Protective tariff. B) Competitive tariff. C) Barrier tariff. D) Defensive tariff. Show Answer Correct Answer: A) Protective tariff. 13. International Economics is a ..... economics A) Positive. B) Normative. C) Public. D) Traditional. Show Answer Correct Answer: B) Normative. 14. A country is said to have a comparative advantage in the production of a good when it ..... A) Has no opportunity cost of producing goods. B) Has lower opportunity cost of producing of the goods. C) Requires fewer labour hours to produce the goods. D) Requires more labour hours to produce the goods. Show Answer Correct Answer: B) Has lower opportunity cost of producing of the goods. 15. Safety, environmental, health, or other technical requirements set by a government. Imports must meet these requirements before they are allowed to come into the country. A) Standards. B) Subsidy. C) Quota. D) Tariffs. Show Answer Correct Answer: A) Standards. 16. External trade is also called A) Foreign trade. B) International trade. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 17. Dynamic comparative advantage theory A) Helps explain why some nations use industrial policy to support potentially competitive new firms. B) Cannot explain strategic competition between firms such as Boeing and Airbus. C) Is another name for Ricardo's comparative advantage theory. D) None of the above. Show Answer Correct Answer: A) Helps explain why some nations use industrial policy to support potentially competitive new firms. 18. An excess demand for a particular currency in the floating exchange rate system will lead to ..... A) A depreciation of that currency. B) An appreciation of that currency. C) A long-term surplus of that currency. D) A long-term shortage of that currency. Show Answer Correct Answer: B) An appreciation of that currency. 19. NOT an argument for free trade A) Improved products. B) Export industries. C) Specialization & comparative advantage. D) Reduced competition. Show Answer Correct Answer: D) Reduced competition. 20. A government procurement regulation or practice constitutes a nontariff barrier when A) Government agencies are required to purchase from the lowest bidder. B) Government shows a preference for domestic sellers over foreign sellers. C) Government requires that goods that it purchases meet a uniform safety standard. D) Government purchases are financed by tax receipts. Show Answer Correct Answer: B) Government shows a preference for domestic sellers over foreign sellers. ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 2International 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