This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 42 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 42 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Should Canada impose a tariff on imports, one would expect Canada's: A) Terms of trade to improve and volume of trade to decrease. B) Terms of trade to worsen and volume of trade to decrease. C) Terms of trade to improve and volume of trade to increase. D) Terms of trade to worsen and volume of trade to increase. Show Answer Correct Answer: A) Terms of trade to improve and volume of trade to decrease. 2. A foreign trade zone is A) A regional area within which trade with foreign nations is allowed. B) A free trade agreement among several nations. C) Designed to limit export of manufactured goods by placing export taxes on goods made within the zone. D) Designed to promote exports by deferring import duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically. Show Answer Correct Answer: D) Designed to promote exports by deferring import duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically. 3. How should developing countries protect their new industries from competition? A) Export duties. B) Indirect taxes. C) Import duties. D) Income tax. Show Answer Correct Answer: C) Import duties. 4. What is true about comparative advantage? A) It was first thought out by the mathematician David Rimaro. B) A country can produce at a lower opportunity cost than another country. C) A country can produce at a higher opportunity cost than another country. D) Comparative advantage assumes that costs change and there is not a constant return to scale. Show Answer Correct Answer: B) A country can produce at a lower opportunity cost than another country. 5. According to comparative advantage theory, nations can still gain from trade even without an absolute advantage. A) True. B) False. Show Answer Correct Answer: A) True. 6. An economy without international trade is known as closed economy. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 7. Which trade agreement are the countries on the map part of? A) ASEAN. B) NAFTA. C) European Union. D) MDH. Show Answer Correct Answer: C) European Union. 8. A person who favors a free-trade policy would most likely ..... A) Support higher tariffs on imports. B) Support lower tariffs on imports. C) More strict embargoes. D) Higher quotas on imports. Show Answer Correct Answer: B) Support lower tariffs on imports. 9. These are the goals of Horizontal FDI, except ..... A) To avoid tariff barriers. B) To reduce production costs. C) To gain market shares and prolong product life cycle. D) To specialize production on an international scale. Show Answer Correct Answer: D) To specialize production on an international scale. 10. Which of the following is not an argument against protective tariffs? A) Restricting international trade robs us of part of its benefits. B) Free admission of imports is one of the most effective ways of expanding the foreign markets of home industries. C) When one country institutes tariffs, it is likely that other countries will follow. D) A tariff that keeps out foreign goods increases the market for U.S. goods. Show Answer Correct Answer: D) A tariff that keeps out foreign goods increases the market for U.S. goods. 11. When a country both exports and imports a type of commodity, the country is engaged in ..... A) Inter-industry trade. B) An attempt to monopolize the relevant industry. C) Increasing returns to scale. D) Intra-industry trade. Show Answer Correct Answer: D) Intra-industry trade. 12. What is a potential benefit of free trade? A) More employment in sunrise industries. B) Specialization in commodity production. C) Less unemployment in sunset industries. D) Access to goods that are not produced in the domestic market. Show Answer Correct Answer: D) Access to goods that are not produced in the domestic market. 13. The Government of India and RBI have an important role in NPCI growth as well as nurturing leading banks in India especially in the first years. A) True. B) False. Show Answer Correct Answer: A) True. 14. Which of the following are protectionism policies purposes?I. infant industry argumentII. transportation cost argumentIII. national security argumentIV. domestic employment argument A) I, II III and IV. B) I, II and III. C) I, III and IV. D) I and IV. Show Answer Correct Answer: C) I, III and IV. 15. When Mataeo buys Euros through ....., he will use his U.S. dollars to pay for them. A) The foreign exchange market. B) The currency exchange market. C) A floating exchange market. D) Foreign currency market. Show Answer Correct Answer: A) The foreign exchange market. 16. Throughout the post-WWII, the importance of tariffs as a trade barrier has A) Increased. B) Decreased. C) Remained the same. D) Fluctuated wildly. Show Answer Correct Answer: B) Decreased. 17. Which team has won 11 games in a row in the last 13? A) Flamengo. B) America MG. C) River Plate. D) Palm trees. Show Answer Correct Answer: B) America MG. 18. The ability to produce more goods than another country using the same amount of resources is known as ..... A) Comparative Advantage. B) Absolute Advantage. Show Answer Correct Answer: B) Absolute Advantage. 19. What does factor intensity reversal mean? A) A good is having high capital labour ratio in two different countries. B) A good is capital intensive in one country and labour intensive in other country. C) Price of capital in one country is high and price of labour in other country is higher. D) None of these. Show Answer Correct Answer: B) A good is capital intensive in one country and labour intensive in other country. 20. The Concept of reciprocal demand was introduced by Ricardo A) True. B) False. Show Answer Correct Answer: B) False. ← 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