This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 41 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 41 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Adam Smith describes trade taking place as a result of countries having ..... in production of particular goods, relative to each other. A) Absolute advantage. B) Comparative advantage. C) Both absolute and comparative advantage. D) Neither absolute nor comparative advantage. Show Answer Correct Answer: A) Absolute advantage. 2. Placing taxes on imported shoes from Vietnam is an example of a A) Trade barrier. B) Trade surplus. C) Exchange rates. D) Absolute advantage. Show Answer Correct Answer: A) Trade barrier. 3. When the government spends more money than it is taking in as revenue, this is known as ..... A) Deficit Spending. B) Surplus Spending. C) Transition. D) Equilibrium. Show Answer Correct Answer: A) Deficit Spending. 4. A payment from the government to businesses. They redistribute income from the general taxpaying public to non-competitive firms, thereby helping the firms to compete with wealthier foreign producers. A) Market advantages. B) Floating exchange rate. C) European Union or EU. D) Subsidies. Show Answer Correct Answer: D) Subsidies. 5. Which nation is not a part of the EU? A) Taiwan. B) Spain. C) Germany. D) France. Show Answer Correct Answer: A) Taiwan. 6. If 1 Dollar = RM 4.10 become 1 Dollar = RM 4.20, it shows that the RM experience ..... of value. A) Falling. B) Rising. Show Answer Correct Answer: A) Falling. 7. When imports, income flows and transfers out of the UK exceed exports, income flows and transfers into the UK A) There is a current account deficit. B) There is a current account surplus. C) The current account is balanced. D) None of above. Show Answer Correct Answer: A) There is a current account deficit. 8. Similar to import tariffs, import quotas tend to result in A) Higher prices and reduced imports. B) Increased government revenue. C) Increased consumer surplus. D) Decreased producer surplus. Show Answer Correct Answer: A) Higher prices and reduced imports. 9. The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources A) Absolute Advantage. B) Comparative Advantage. C) Monopoly. D) Governmental Advantage. Show Answer Correct Answer: A) Absolute Advantage. 10. The figure illustrates the international movement of capital. When there is international movement of capital in both Nations, the amount of capital movement is ..... A) AB. B) O1B. C) O2A. D) O2B. Show Answer Correct Answer: A) AB. 11. The value of all monetary transactions between a country's economy and the rest of the world. A) Balance of Trade. B) Trade Deficit. C) Balance of Payments. D) Trade Surplus. Show Answer Correct Answer: C) Balance of Payments. 12. An argument that supports the use of trade barriers when a new industry is in the early stages of development. A) Free Trade. B) Infant Industries. C) National Security. D) Balance of Trade. Show Answer Correct Answer: B) Infant Industries. 13. Coming into effect in 1994, NAFTA encouraged free trade between the United States and which two other countries? A) Canda and cuba. B) Japan and china. C) Canada and mexico. D) Panama and brazil. Show Answer Correct Answer: C) Canada and mexico. 14. The purpose of a tariff, when used for protectionism, is to A) Limit the number of foreign goods imported into the country. B) Make an imported good more expensive than its domestically produced counterpart. C) Raise revenues to pay subsidies to domestic producers. D) Stall importation while perishable items rot. Show Answer Correct Answer: B) Make an imported good more expensive than its domestically produced counterpart. 15. Which of the following is NOT a major themes of International Economics? A) Gains from Trade. B) Pattern of Trade. C) Exchange Rate Determination. D) Public Finance. Show Answer Correct Answer: D) Public Finance. 16. An import quota is a A) Tax on import quantities above the legal limit. B) Way to increase tariff revenues for the exporting country. C) Legal limit on the amount of a good that can be imported into a country. D) Legal incentive for members of WTO to increase their exports of a good or service. Show Answer Correct Answer: C) Legal limit on the amount of a good that can be imported into a country. 17. Plaza was establish by many people? A) 4. B) 3. C) 1. D) None of above. Show Answer Correct Answer: B) 3. 18. U.S. goods become more expensive A) When the dollar appreciates. B) When the dollar depreciates. Show Answer Correct Answer: A) When the dollar appreciates. 19. The production possibilities curve is an illustration of what? A) Opportunity costs and trade-offs. B) Only opportunity costs. C) Only trade-offs. D) None of the above. Show Answer Correct Answer: A) Opportunity costs and trade-offs. 20. What is an advantage of a floating exchange rate? A) There is no advantadge. B) Interest rates are free to be employed to domestic goals. C) Reduced speculation from foreign investors. D) High consumer and business confidence. Show Answer Correct Answer: B) Interest rates are free to be employed to domestic goals. ← 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