This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 49 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 49 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. One of the predictions of the Heckscher-Ohlin model is that: A) Countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other. B) Countries will tend to specialize, but not completely, in their comparative advantage good. C) Reciprocal demand leads to an equilibrium terms of trade by inducing changes in both demand and supply. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. Export will ..... and import will ..... when local currency had undervalued. A) Increase, increase. B) Decrease, decrease. C) Increase, decrease. D) Decrease, increase. Show Answer Correct Answer: C) Increase, decrease. 3. That the division of labor is limited by the size of the market best applies to which explanation of trade: A) Factor endowment theory. B) Product life cycle theory. C) Economies of scale theory. D) Overlapping demand theory. Show Answer Correct Answer: C) Economies of scale theory. 4. Mill's Theory of reciprocal demand is a two by two model A) True. B) False. Show Answer Correct Answer: A) True. 5. This is a tax on imports that is used to increase price of foreign products and raise government revenue. A) Tariff. B) Quota. C) Subsidy. D) Embargo. Show Answer Correct Answer: A) Tariff. 6. ..... brings money into the country by sending products ..... the country. A) Exports; into. B) Exports; out of. C) Imports; into. D) Imports; out of. Show Answer Correct Answer: B) Exports; out of. 7. The balances of payments refer to ..... A) The balance of financial records showing the total inflow of money into the country. B) The balance of financial records showing the total money outflow paid to other countries. C) The balance of financial records showing the total export and import to other countries. D) The balance of financial records showing the total inflow of money into the country and the total money outflow paid to other countries. Show Answer Correct Answer: D) The balance of financial records showing the total inflow of money into the country and the total money outflow paid to other countries. 8. Balance of trade is the ..... A) Different between export and import of service. B) Total of export and import service. C) Different between export and import of goods. D) Total of export and import of goods. Show Answer Correct Answer: C) Different between export and import of goods. 9. Which of the following would benefit the most from protectionist policy? A) Big firms. B) Domestic industry. C) Importers. D) Unemployed. Show Answer Correct Answer: B) Domestic industry. 10. Which of the following economic factors is MOST LIKELY to support free trade? A) The United Steelworkers of America. B) Coca-Cola Corporation. C) The Anti-Globalization Coalition. D) US electronics producers. Show Answer Correct Answer: B) Coca-Cola Corporation. 11. Which of the following is the term used for the monthly payment on insurance policies? A) Deductible. B) Premium. C) Term. D) Charge. Show Answer Correct Answer: B) Premium. 12. The relationship between exchange rate and quantity demand of foreign currency is ..... A) Negative. B) Positive. Show Answer Correct Answer: A) Negative. 13. ..... favor trade barriers, where as ..... favor fewer (or no) trade restrictions. A) Embargos / Quotas. B) Protectionists / Free Traders. C) Subsidies / Tariffs. D) Absolute Advantage / Comparative Advantage. Show Answer Correct Answer: B) Protectionists / Free Traders. 14. According to Gravity model, we expect the United States to trade less with: A) Canada, Mexico. B) Japan, China. C) Bangladesh, Nepal. D) Germany. Show Answer Correct Answer: C) Bangladesh, Nepal. 15. This refers to free trade agreements among countries in a region. A) Trade agreement. B) Trading bloc. C) Trade Barriers. D) All of the above. Show Answer Correct Answer: B) Trading bloc. 16. A tax on imported goods and usually designed to protect domestic production of similar goods is A) Tariff. B) Quota. C) Embargo. D) Subsidy. Show Answer Correct Answer: A) Tariff. 17. Why do people trade? A) They want to find out how much their currency is worth compared to another country's currency. B) They expect to be better off as a result of trade. C) They trade to increase scarcity. D) They trade so they don't have to barter. Show Answer Correct Answer: B) They expect to be better off as a result of trade. 18. The figure illustrates the international movement of capital. When there is no international movement of capital, Nation 1 and Nation 2 invest their entire capital stock domestically, which area belongs to Nation 2's capital owners? A) O1CGA. B) O1FGA. C) O1JMA. D) O2HMA. Show Answer Correct Answer: D) O2HMA. 19. Country "G" can produce 20 hamburgers or 80 hot dogs. Country "H" can produce 14 hamburgers or 28 hot dogs. What is the opportunity cost for Country "H" to produce 1 hamburger? A) 2 hot dogs. B) 1/2 hot dogs. C) 1.5 hot dogs. D) 15 hot dogs. Show Answer Correct Answer: A) 2 hot dogs. 20. One of Australia's top five imports is: A) Iron Ore. B) Coal. C) Passenger Motor Vehicles. D) Natural Gas. Show Answer Correct Answer: C) Passenger Motor Vehicles. ← 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