This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Economics – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 6 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected? A) Mexico has less purchasing power in Chinese currency. B) Mexico benefits from increased purchasing power. C) Mexico would have more Chinese investors. D) They would be invaded by China. Show Answer Correct Answer: A) Mexico has less purchasing power in Chinese currency. 2. The purchase of United States government bonds by Japanese investors will be included in Japan's A) Current account. B) Financial account. C) Trade deficit. D) Foreign direct investment. E) Imports. Show Answer Correct Answer: B) Financial account. 3. ..... is a meeting of the "trade ministers" of the members of countries of the trade organisation A) Ministerial. B) Conference. C) General Council. D) IP Council. Show Answer Correct Answer: A) Ministerial. 4. Who gains the most from free foreign trade? A) Import-competing industries;. B) Consumers;. C) Developing countries;. D) Young branches of production. Show Answer Correct Answer: B) Consumers;. 5. The idea that a nation will specialize in what it can produce at a lower opportunity cost than any other nation. A) Absolute Advantage. B) Comparative Advantage. C) Law of Comparative Advantage. D) Absolute Disadvantage. Show Answer Correct Answer: B) Comparative Advantage. 6. Fixed exchange rate is fixed by the Government in terms of ..... A) Currency. B) Gold Reserves. C) Fixed assets. D) All of these. Show Answer Correct Answer: B) Gold Reserves. 7. When a nation imports more than it exports, economists say it has which of the following? A) A trade surplus. B) A balance of trade. C) A trade deficit. D) A national difference. Show Answer Correct Answer: C) A trade deficit. 8. An agreement that will reduce tariffs and other trade barriers is an example of a A) Free Trade area. B) Preferential trade area. C) Customs union. D) Common market. Show Answer Correct Answer: B) Preferential trade area. 9. Coins and paper bills used as money A) Currency. B) Tender. C) Mediums of exchange. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. Which American industry has least been affected by import competition in recent years A) Automobiles. B) Steel. C) Radios and Tvs. D) Computer software. Show Answer Correct Answer: D) Computer software. 11. Which of the following is not an advantage of international trade? A) Better product can be obtained. B) Prices for products are lower. C) Local producers may be hurt. D) Products that cannot be produced at home can be obtained. Show Answer Correct Answer: C) Local producers may be hurt. 12. In the country levying the tariff, the tariff will A) Increase both consumer and producer surplus. B) Decrease both consumer and producer surplus. C) Increase consumer surplus and decrease producer surplus. D) Decrease consumer surplus and increase producer surplus. Show Answer Correct Answer: D) Decrease consumer surplus and increase producer surplus. 13. ..... raises the standard of living worldwide and can lead to a more peaceful, interdependent world. A) Trade barriers. B) Exchange rates. C) Protectionism. D) Free trade. Show Answer Correct Answer: D) Free trade. 14. The Ricardian two-country, two-good model predicts that there are potential benefits from trade, but NOT A) The effect of trade on income distribution. B) When one country has an absolute advantage in the production of both goods. C) The mechanism that determines which country will specialize in which good. D) When both countries have the same types of technology available. Show Answer Correct Answer: A) The effect of trade on income distribution. 15. A system in which the currency of one nation A) Trade Wars. B) Foreign Exchange Market. C) Foreign Exchange Rate. D) Fixed Rate of Exchange. Show Answer Correct Answer: D) Fixed Rate of Exchange. 16. In what document the "promise" keyword is used A) Letter of credit. B) Bill of Exchange. C) Visa card. D) Promissory note. Show Answer Correct Answer: B) Bill of Exchange. 17. There are two main categories of international trade theories-classical by Adam Smith and Ricardo; and modern by ..... A) Heckscher and Ohlin; Adam Smith and Ricardo. B) Heckscher and Ohlin; Keynes. C) Keynes; Heckscher and Ohlin. D) Adam Smith and Ricardo; Heckscher and Ohlin. Show Answer Correct Answer: D) Adam Smith and Ricardo; Heckscher and Ohlin. 18. Travis takes two trips to Ecuador. On his first trip, he finds that one US dollar is worth 25, 000 Ecuadorian Sucre. On his return trip, he finds that the dollar is now worth 26, 000 Ecuadorian Sucre. What is a LIKELY result of this change in exchange rates? A) More Americans will travel to Ecuador. B) More money will be printed in Ecuador. C) More Europeans will travel to Ecuador. D) Fewer Americans will travel to Ecuador. Show Answer Correct Answer: A) More Americans will travel to Ecuador. 19. Which of these does not have an effect on exchange rates? A) Inflation. B) Selling of domestic reserves. C) Selling of foreign reserves. D) Higher domestic demand. Show Answer Correct Answer: D) Higher domestic demand. 20. Which headline below is an example of using standards as a trade barrier? A) "US producers of wheat get big payday from Congress". B) "Only professionally cleaned oranges allowed in the US". C) "Limit of 1 million tons of sugar to be imported". D) "Mexican imports completely abolished". Show Answer Correct Answer: B) "Only professionally cleaned oranges allowed in the US". ← PreviousNext →Related QuizzesEconomics QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 3International Economics Quiz 4International Economics Quiz 5International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9International Economics Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books