International Economics Quiz 48 (20 MCQs)

Quiz Instructions

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1. If the US $ were to appreciate in relation to the Euro, what effect would this have?

Correct Answer: B) US consumers can buy more European goods and services for fewer $ $.

2. Foreign investors prefer direct investments to portfolio investments because they want to .....

Correct Answer: C) Retain direct control over their unique production knowledge or managerial skills.

3. What a company gives up in order to make another product is known as .....

Correct Answer: A) Opportunity Cost.

4. Tariffs are NOT defended on the grounds that they

Correct Answer: A) Improve the terms of trade of foreign nations.

5. Why does the United States need to import products?

Correct Answer: B) Some are easier and cheaper to make in other countries.

6. NAFTA, the EU, and ASEAN all benefit its members by .....

Correct Answer: D) Lowering trade barriers with their member nations.

7. Did you represent the theory of purchasing power parity?

Correct Answer: D) Castle Castle.

8. When the pound appreciates

Correct Answer: B) Imports become cheaper.

9. An increase in the international value of United States dollar will tend to cause

Correct Answer: A) United States exports to fall.

10. Where is the headquarters of the WTO Located?

Correct Answer: B) Geneva.

11. What do you need to produce other goods and services?

Correct Answer: B) Capital goods.

12. A system in which the exchange rates for currencies change as the supply of and demand for the currencies change.

Correct Answer: B) Flexible Rate of Exchange.

13. What is India's financial motto?

Correct Answer: C) Cash is king, digital is divine.

14. Ban trade with a country usually due to political disputes

Correct Answer: B) Embargo.

15. Which of the following country is not the member of the ASEAN?

Correct Answer: D) Mauritius.

16. The ability of one trading nation to make a product more efficiently than another trading nation.

Correct Answer: A) Absolute Advantage.

17. A means of preventing a foreign product of service from freely entering a nation's territory.

Correct Answer: D) Trade Barrier.

18. If the Balance of Payment of a country is adverse, then which institution will help that country?

Correct Answer: C) International Monetary fund.

19. Ways to keep imported products out of a country by establishing rules and regulations on how they can be used or produced.

Correct Answer: A) Standard.

20. A payment from the government to encourage or protect a certain economic activity is called a?

Correct Answer: A) Subsidy.