This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 38 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 38 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The opening or expansion of international trade usually affects all members of society: A) Positively. B) Negatively. C) Most positively but some negatively. D) Most negatively but some positively. Show Answer Correct Answer: C) Most positively but some negatively. 2. Which of the following is an effect of a tariff? A) Lower prices for consumers. B) Higher prices for consumers. C) Consumers can't get product once quota is met. D) It helps foreign producers. Show Answer Correct Answer: B) Higher prices for consumers. 3. Internal trade concerned with two monetary policy A) True. B) False. Show Answer Correct Answer: B) False. 4. Free traders point out that: A) There is usually an efficiency gain from having tariffs. B) There is usually an efficiency loss from having tariffs. C) Producers lose from tariffs at the expense of consumers. D) Producers lose from tariffs at the expense of the government. Show Answer Correct Answer: B) There is usually an efficiency loss from having tariffs. 5. In the short-run, tariffs and quotas help protect A) Domestic jobs. B) Foreign employment. C) Price wars. D) Consumer choice. Show Answer Correct Answer: A) Domestic jobs. 6. There is an absolute advantage when one country is more efficient than any other country in producing a particular product. A) True. B) False. Show Answer Correct Answer: A) True. 7. This law states that in a production process, adding more workers might initially increase output and eventually creates the optimal output per worker. A) Diminishing marginal utility. B) Negative marginal returns. C) Diminishing marginal benefit. D) Diminishing marginal returns. Show Answer Correct Answer: D) Diminishing marginal returns. 8. An increase in domestic inflation rates, relative to the world, leads to which of the following: A) An increase in demand for the domestic currency. B) A decrease in demand for the domestic currency. Show Answer Correct Answer: B) A decrease in demand for the domestic currency. 9. In a fixed exchange rate system, a government must intervene to stop the value of its currency from falling by: A) Buying its currency. B) Selling its currency. Show Answer Correct Answer: A) Buying its currency. 10. A tariff..... A) Encourages people to buy goods made from their country. B) Increases trade between other countries. C) Stops trade completely. D) Only placed to encourage democracy. Show Answer Correct Answer: A) Encourages people to buy goods made from their country. 11. The aim of internal and external trade is to stabilize the prize level A) True. B) False. Show Answer Correct Answer: A) True. 12. Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S should specialize in ..... A) Automobiles. B) Airplanes. C) Both goods. D) Neither of the goods. Show Answer Correct Answer: B) Airplanes. 13. How will Japan's short-term investment in India come into India's balance of payments? Short-term investment by Japan in India will be on which side of India's balance of payments? A) Current Account-Credit Side On the credit side of the current account. B) Current Account-Credit Side On the debit side of the current account. C) Capital Account-Credit Side On the credit side of the capital account. D) Capital Account-Borrowing Side The borrowing side of the capital account. Show Answer Correct Answer: C) Capital Account-Credit Side On the credit side of the capital account. 14. First Economist who introduced basic idea of International Economics A) Adam Smith. B) David Ricardo. C) Hume. D) J M Keynes. Show Answer Correct Answer: C) Hume. 15. The formula for finding the export quota is: A) Que = YaSMIN / Expert 1/2. B) K = Export / Yam 100%. C) K = Yam / Export 100%. D) None of above. Show Answer Correct Answer: B) K = Export / Yam 100%. 16. This is the advantage companies get when production of either goods or services becomes more efficient. A) Economies of scale. B) Economies of scope. C) Command economy. D) Market economy. Show Answer Correct Answer: A) Economies of scale. 17. What is the basis for calculating comparative advantage in international trade? A) Cost of producing goods or services. B) Opportunity cost of producing goods or services. C) Relative prices of commodities. D) Profits from international trade. E) All true. Show Answer Correct Answer: B) Opportunity cost of producing goods or services. 18. Which is NOT a benefit of Trade Barriers A) Make imports more expensive to buy. B) Causes higher demand for domestic goods. C) Protects domestic jobs. D) Lowers demand for domestic goods. Show Answer Correct Answer: D) Lowers demand for domestic goods. 19. Which of the following is not a benefit of international trade? A) Lower domestic prices. B) A greater range of consumption choices. C) High wage levels for all domestic workers. D) Development of more efficient methods and new products. Show Answer Correct Answer: C) High wage levels for all domestic workers. 20. Ad valorem tariffs are collected as A) Fixed amounts of money per unit traded. B) A percentage of the price of the product. C) A percentage of the quantity of imports. D) All of the above. Show Answer Correct Answer: B) A percentage of the price of the product. ← 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