This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 31 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 31 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Two main characteristics of investments are: A) Risk and profitability. B) Resource transfer and balance of payment effects. C) Job creation and technology transfer. D) Higher rate of returns and technology transfer. Show Answer Correct Answer: A) Risk and profitability. 2. An individual, firm, or country has the lowest opportunity cost for producing the good or service. A) Absolute advantage. B) Comparative advantage. C) Opportunity Cost. D) Balance of trade. Show Answer Correct Answer: B) Comparative advantage. 3. International economics is an applied branch of ..... economics A) Micro. B) Macro. C) Behavioural. D) Financial. Show Answer Correct Answer: B) Macro. 4. If a country can produce a certain good at a lower opportunity cost than another country is has the ..... A) Absolute advantage. B) Competition. C) Specialization. D) Comparative advantage. Show Answer Correct Answer: D) Comparative advantage. 5. NAFTA BEST represents the controversy that exists over A) Scarcity. B) Embargoes. C) Debt. D) Trade barriers. Show Answer Correct Answer: D) Trade barriers. 6. Which of the following theory of international trade does not suppose " complete specialisation" ? A) Absolute cost advantage theory. B) Relative cost advantage theory. C) Heckscher Ohlin model of international trade. D) All of these. Show Answer Correct Answer: C) Heckscher Ohlin model of international trade. 7. Foreign trad may not lead to exhaustion of essential materials and minerals. A) True. B) False. Show Answer Correct Answer: B) False. 8. Free trade means A) The countries use the same currency. B) No trade barriers. C) There is a quota on some goods. D) Trade is quick and easy. Show Answer Correct Answer: B) No trade barriers. 9. A closed economy is a closed economy. A) Whose borders are not open to other countries whose borders are not open to other countries. B) Who does not have any financial relationship with any other country Who does not have any financial relationship with any other country. C) One who does minimum international trade is doing minimum international trade. D) None of these None of the given. Show Answer Correct Answer: B) Who does not have any financial relationship with any other country Who does not have any financial relationship with any other country. 10. There is grater amount of risk involved in the internal trade A) True. B) False. Show Answer Correct Answer: B) False. 11. Higher income levels in the US would result in A) Increased exports and appreciation of the US Dollar. B) Increased exports and depreciation of the US dollar. C) Increased imports and appreciation of the US Dollar. D) Increased imports and depreciation of the US Dollar. Show Answer Correct Answer: D) Increased imports and depreciation of the US Dollar. 12. A decrease in value of one currency relative to the other A) Currency Depreciation. B) Currency Appreciation. C) Exchange Rates. D) None of above. Show Answer Correct Answer: A) Currency Depreciation. 13. China has a pegged exchange rate which means A) It always keeps below US $ and maintains its advantage in trade. B) It is part fixed and part floating depending on world events. C) It is pegged to currency in Asia so that CVhina maintains its dominance. D) All of these options. Show Answer Correct Answer: A) It always keeps below US $ and maintains its advantage in trade. 14. Barter means: A) The method of consumption of goods and services. B) Compensatory trading style. C) Natural exchange of one good or service for another good or service. D) None of above. Show Answer Correct Answer: C) Natural exchange of one good or service for another good or service. 15. If the U.S. government uses an expansionary monetary policy to reduce interest rates, then it will: A) Lead to higher imports and lower exports. B) Cause the exchange rate for U.S. currency to depreciate. C) Lower levels of consumption and investment. D) Cause the exchange rate for U.S. currency to appreciate. Show Answer Correct Answer: B) Cause the exchange rate for U.S. currency to depreciate. 16. Someone who strongly opposes a trade barrier like quotas or tariffs would MOST LIKELY argue that the barrier A) Might cause more unemployment in domestic industries. B) Will lead to higher prices and fewer imported goods. C) Would lead to lower government involvement in the economy. D) Would completely eliminate imported goods. Show Answer Correct Answer: B) Will lead to higher prices and fewer imported goods. 17. Two or more people depending on each other for goods and services is called ..... A) Economic specialization. B) Scarcity. C) Economic choices. D) Economic interdependence. Show Answer Correct Answer: D) Economic interdependence. 18. The classical trade theories of Smith and Ricardo predict that A) Countries will completely specialize in the production of export goods. B) Considerable trade will occur between countries with different levels of technology. C) Small countries could obtain all of the gains from trade when trading with large countries. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. 'Transactional activities involving export and import of goods and services between one country with another'. This statement describes about ..... A) International trade. B) Macroeconomic problem. C) Public finance. D) None of above. Show Answer Correct Answer: A) International trade. 20. The IMF was established in the year A) 1946. B) 1944. C) 1947. D) 1945. Show Answer Correct Answer: A) 1946. ← 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