This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 5 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Any commercial transaction that crosses the borders of two or more nations is known as A) International business. B) Global manufacturing. C) Domestic marketing. D) Market segmentation. Show Answer Correct Answer: A) International business. 2. When a country wants to cut some or all trade off with another country as a punishment, they will place what on the other country? A) Embargo. B) Tariff. C) Subsidies. D) Quota. Show Answer Correct Answer: A) Embargo. 3. The trade model of the Swedish economists Heckscher and Ohlin maintains that A) Absolute advantage determines the distribution of the gains from trade. B) Comparative advantage determines the distribution of the gains from trade. C) The division of labor is limited by the size of the world market. D) A country exports goods for which its resource endowments are most suited. Show Answer Correct Answer: D) A country exports goods for which its resource endowments are most suited. 4. When the US$ exchange rate falls it will usually A) Help to reduce a US trade deficit. B) Increase the foreign price of US exports. C) Reduce the price of US imports. D) Reduce US inflation. Show Answer Correct Answer: A) Help to reduce a US trade deficit. 5. 1) Trade between two countries can benefit both countries if A) Each country enjoys superior terms of trade. B) Each country exports that good in which it has a comparative advantage. C) Each country produces a wide range of goods for export. D) Each country has a more elastic supply for the exported goods. Show Answer Correct Answer: B) Each country exports that good in which it has a comparative advantage. 6. What is MOST LIKELY to happen to U.S. imports and exports if the US dollar becomes stronger relative to other currencies? A) Imports will decrease, exports will increase. B) Both imports and exports will increase. C) Imports will increase, exports will decrease. D) Both imports and exports will decrease. Show Answer Correct Answer: C) Imports will increase, exports will decrease. 7. Country's wealth was determined by the amount of its gold and silver holdings. A) Trade surplus. B) Mercantilism. C) Absolute advantage. D) Competitive advantage. Show Answer Correct Answer: B) Mercantilism. 8. Which of the following is not a non-tariff barrier? A) A quota on apparel. B) A tax equal to 12% of value on imported oil. C) A regulation requiring government agencies to favor domestically producers. D) A voluntary export restraint on cars. Show Answer Correct Answer: B) A tax equal to 12% of value on imported oil. 9. ..... established by the interacion of the market forces of demand for and supply of the currency A) Fixed Exchange Rate. B) Flexible Exchange Rate. C) Floating exchange rate. D) None of above. Show Answer Correct Answer: B) Flexible Exchange Rate. 10. Which of the following us not a characteristic of international trade? A) Tariff and quota. B) Foreign exchange market. C) Common currency. D) Higher national standard of living. Show Answer Correct Answer: C) Common currency. 11. WTO is a..... A) Permanent Institution. B) Multilateral Agreement. C) Multilateral Institutions. D) Provisional Institutions. Show Answer Correct Answer: B) Multilateral Agreement. 12. Top 5 two-way trading partners in 2018 A) China, Japan, United States, Republic of Korea, India. B) United States, China, Japan, Republic of Korea, India. C) United States, China, India, Japan, Republic of Korea. D) China, United States, Japan, Republic of Korea, India. Show Answer Correct Answer: A) China, Japan, United States, Republic of Korea, India. 13. This details a person's borrowing and repayment history for the last seven years reported to the company's by a person's previous and current lenders. A) Insurance. B) Payment history. C) Credit Report. D) IRA. Show Answer Correct Answer: C) Credit Report. 14. What is a disadvantage of Free Trade Agreements A) Better materials. B) Outsourcing of jobs. C) Bad labels. D) None of above. Show Answer Correct Answer: B) Outsourcing of jobs. 15. A positive balance of trade is also known as a: A) Trade Surplus. B) Trade Deficit. C) Balance of Trade. D) None of above. Show Answer Correct Answer: A) Trade Surplus. 16. The developing countries need to protect their infant industries from competition through imposing A) Indirect taxes. B) Income taxes. C) Import taxes. D) Export taxes. Show Answer Correct Answer: C) Import taxes. 17. Import colors- A) Leading to a reduction in international trade. B) Causing prices to rise. C) Brings income to the state budget. D) All of them. Show Answer Correct Answer: D) All of them. 18. Economies of scale can be defined as: A) An increase in average production costs as the quantity of production is increased. B) A fall in average production costs as the quantity of production is increased. C) An increase in total production costs as the quantity of production is increased. D) A fall in total production costs as the quantity of production is increased. Show Answer Correct Answer: B) A fall in average production costs as the quantity of production is increased. 19. An appreciation of a country's currency means that for foreigners this country's goods are A) Cheaper. B) More expensive. Show Answer Correct Answer: B) More expensive. 20. The opportunity cost for Timmy to produce one desk is 4.5 chairs. The opportunity cost for Lauren to produce one desk is 6 chairs. Knowing this, who should specialize in producing desks? A) Lauren, because she has the higher opportunity cost. B) Timmy, because he has the lower opportunity cost. C) There is not enough information to know. D) None of above. Show Answer Correct Answer: B) Timmy, because he has the lower opportunity cost. ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 3International Economics Quiz 4International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9International Economics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books