This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 34 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 34 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The figure illustrates the international movement of capital. When there is no international movement of capital in both Nations, the yield for Nation 2's capital owners is the area of ..... A) THMR. B) O2JMA. C) O2HMA. D) HJM. Show Answer Correct Answer: C) O2HMA. 2. A country should specialize in production of the good in which they have an absolute advantage. A) True. B) False. Show Answer Correct Answer: B) False. 3. An exchange rate system where the central bank sets the value of the exchange rate in relation to another currency is referred to as a: A) Flexible exchange rate system. B) Fixed exchange rate system. C) Floating exchange rate system. D) Stable exchange rate system. Show Answer Correct Answer: B) Fixed exchange rate system. 4. If the real interest rates in the United States rise relative to rates in other countries, what will happen to the international value of the United States dollar and United States net exports? A) Value of the dollar depreciate, net exports increase. B) Value of the dollar depreciates, net exports decrease. C) Value of the dollar depreciates, net exports do not change. D) Value of the dollar appreciates, net exports decrease. E) Value of the dollar appreciates, net exports increase. Show Answer Correct Answer: D) Value of the dollar appreciates, net exports decrease. 5. If the value of a country's currency increases, which of the following is expected: A) Inflation. B) Deflation. Show Answer Correct Answer: B) Deflation. 6. The price of one nation's currency in terms of another nation's currency is called A) Foreign exchange. B) Exchange rate. C) Foreign exchange rate. D) Currency converter. Show Answer Correct Answer: C) Foreign exchange rate. 7. How many members are in the ASEAN? A) 18. B) 67. C) 10. D) 53. Show Answer Correct Answer: C) 10. 8. Higher interest rates A) Make foreigners decide to buy more of a country's government bonds. B) Attracts portfolio flows to a country. C) Controls inflationary pressures. D) All the above. Show Answer Correct Answer: D) All the above. 9. A tariff that prohibits imports has only A) A revenue effect and redistribution effect. B) Revenue effect and protection effect. C) Consumption effect and protection effect. D) Redistribution effect and consumption effect. Show Answer Correct Answer: C) Consumption effect and protection effect. 10. What is a quota? A) A government order to stop trade. B) A limit placed on imports. C) A tax placed on imports. D) None of above. Show Answer Correct Answer: B) A limit placed on imports. 11. Free traders maintain that an open economy is advantageous in that it provides all of the following except A) Increased competition for world producers. B) A wider selection of products for consumers. C) The utilization of the most efficient production methods. D) Relatively high wages levels for all domestic workers. Show Answer Correct Answer: D) Relatively high wages levels for all domestic workers. 12. To whom you atribute the modern theory of international trade? A) Ohlin. B) Viner. C) Ellsworth. D) None of above. Show Answer Correct Answer: A) Ohlin. 13. An import quota is meant to (blank) the number of a particular good brought into the country. A) Affect. B) Benefit. C) Restrict. D) Increase. Show Answer Correct Answer: C) Restrict. 14. IBRD stands for..... A) International Bank for Reconstruction and Development. B) Industrial Bank for Revival and Development. C) Investment Bank for Reconstruction and Development. D) Indian Bank for Reconstruction and Development. Show Answer Correct Answer: A) International Bank for Reconstruction and Development. 15. What is a consequence of quotas for consumers in the US? A) Lower prices. B) Higher Prices. C) Higher standards set on imported goods. D) Lower subsidies. Show Answer Correct Answer: B) Higher Prices. 16. Ad valorem tariff is a ..... A) Tariff imposed by the government on the imposed products. B) Tariff imposed by the government on the exported products. C) Tariff imposed on imported goods based on the value of the good. D) Tariff imposed in a fixed amount charged per unit of imported goods. Show Answer Correct Answer: C) Tariff imposed on imported goods based on the value of the good. 17. International trade and specialization most often lead to which of the following? A) An increase in a nation's productivity. B) A decrease in a nation's economic growth in the long term. C) An increase in a nation's import tariffs. D) A decrease in a nation's standard of living. Show Answer Correct Answer: A) An increase in a nation's productivity. 18. Having a comparative advantage in a good means that a country can produce the good A) Comparatively faster than any other country. B) Cheaper than most countries. C) At a lower opportunity cost compared to another country. D) Better than every other country in the world. Show Answer Correct Answer: C) At a lower opportunity cost compared to another country. 19. A trade war is a cost of A) Trading blocs. B) Globalization. C) Trade barriers. D) Exchange rates. Show Answer Correct Answer: C) Trade barriers. 20. An argument against trade protectionism is that it will increase A) Competition for domestic industries. B) Domestic price level. C) The current account deficit. D) Opportunities for domestic infant industries. Show Answer Correct Answer: B) Domestic price level. ← 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