This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 50 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 50 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... is the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group. A) Depreciation. B) Absolute advantage. C) Comparative advantage. D) Appreciation. Show Answer Correct Answer: B) Absolute advantage. 2. The EU A) Does not allow free movement of people. B) Creates a market for unrestricted trade between 25 countries. C) Allows each country to set their own employment and product safety laws. D) Creates more competition between EU based firms. Show Answer Correct Answer: D) Creates more competition between EU based firms. 3. The real income of domestic producers and consumers can be increased by A) Technological progress but not international trade. B) International trade but not technological progress. C) Technological progress and international trade. D) Neither technological progress nor international trade. Show Answer Correct Answer: C) Technological progress and international trade. 4. How is an exchange rate determined in the money market? A) The forces of supply and demand. B) Government/the Federal Reserve Bank. C) Whatever sellers of goods are willing to take. D) Investors decide the value of the currency they wish to invest. Show Answer Correct Answer: A) The forces of supply and demand. 5. Each country has a new infant industry to promote. Countries use the infant industry argument to ..... A) Control money supply in the economy. B) Protect new industries from the establishment of foreign competitors. C) Avoid structural unemployment. D) Reduce inflation problems. Show Answer Correct Answer: B) Protect new industries from the establishment of foreign competitors. 6. Which of the following is international trade? A) Trade between provinces. B) Trade between regions. C) Trade between countries. D) None. Show Answer Correct Answer: C) Trade between countries. 7. Goods and services produced in one country and purchased by another A) Imports. B) Exports. C) Economic Advantages. D) Absolute Advantages. Show Answer Correct Answer: B) Exports. 8. If two countries begin to trade and both produce a product subject to internal economies of scale, then the country with the ..... rate of production will ..... production until it controls ..... of the market. A) Lower; increase; 100%. B) Higher; increase; 100%. C) Higher; increase; 50%. D) Lower; increase; 50%. Show Answer Correct Answer: B) Higher; increase; 100%. 9. Economist believe which of the following are benefits of international trade: A) There can be increased consumption for all. B) Global production will be increased. C) World resources will be used more efficiently. D) All of these are true. Show Answer Correct Answer: D) All of these are true. 10. Terms of Trade may be flavorable or unfavourable A) True. B) False. Show Answer Correct Answer: A) True. 11. The value of all money coming into a country thanks to exports, minus all the money going out of the country as it pays for imports A) Absolute advantage. B) Balance of payments. C) Comparative advantage. D) Unfavorable Balance of Trade. Show Answer Correct Answer: B) Balance of payments. 12. What trade agreement reduces trade barriers between the US, Canada, & Mexico? A) European Union. B) North American Free Trade Agreement. C) Association of Southeast Asian Nations. D) United Nations. Show Answer Correct Answer: B) North American Free Trade Agreement. 13. A strong dollar leads to A) Cheaper imports. B) More expensive imports. C) No change in international prices. D) Cheaper exports. Show Answer Correct Answer: A) Cheaper imports. 14. The figure illustrates the international movement of capital. When there is international movement of capital in both Nations, how does the yield for Nation 2's owners of capital change? A) Lose THMR. B) Gain THMR. C) Lose THME. D) Gain THME. Show Answer Correct Answer: A) Lose THMR. 15. Goods or services that a country sells to other nations A) Duty. B) Tariff. C) Export. D) Import. Show Answer Correct Answer: C) Export. 16. Which of the following is true in the short run if consumers buy more imported goods and fewer domestic goods? A) The trade balance moves toward deficit, and equilibrium income decreases. B) The trade balance moves toward deficit, and equilibrium income increases. C) The trade balance moves toward surplus, and equilibrium income is unaffected. D) The trade balance moves toward surplus, and equilibrium income decreases. E) The trade balance is unaffected, and equilibrium income decreases. Show Answer Correct Answer: A) The trade balance moves toward deficit, and equilibrium income decreases. 17. What is the impact of an increase of tariffs on imported goods for domestic producers A) Government revenues will increase. B) Prices will decrease. C) Imports will fall. D) Domestic firms will produce more. Show Answer Correct Answer: D) Domestic firms will produce more. 18. If the value of a country's exports fall short of the value of its imports A) Trade deficit. B) Trade surplus. C) Balance of trade. D) None of above. Show Answer Correct Answer: A) Trade deficit. 19. An import quota restricts the volume of imports much speedier and tighter than a tariff A) True. B) False. Show Answer Correct Answer: B) False. 20. International trade in intermediate goods is a major part of total merchandise trade. A) It depends on a data source. B) It depends on an exchange rate. C) True. D) False. Show Answer Correct Answer: C) True. ← 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