This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 108 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 108 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Assume the inflation rate in Mexico is significantly higher than its trading partners. Which of the following will occur to the demand, supply, and international value of the Mexican peso? A) The demand will increase, the supply will increase, and the peso will depreciate. B) The demand will increase, the supply will decrease, and the peso will appreciate. C) The demand will decrease, the supply will increase, and the peso will appreciate. D) The demand will decrease, the supply will increase, and the peso will depreciate. E) The demand will decrease, the supply will decrease, and the peso will depreciate. Show Answer Correct Answer: D) The demand will decrease, the supply will increase, and the peso will depreciate. 2. Which are true ..... A) All are true. B) Military self-sufficiency preys on people's fear of another war and being unable to defend themselves, so they argue that the industry related to the military must be protected and maintained domestically. C) Diversification for stability looks at the need to have a well-rounded economy that is not too heavily invested in any one area that could be subject to collapse. (That is the proverbial "all of our eggs in one basket" argument.). D) New or infant industries argue that they need protection during the infancy stage to help them grow and become strong enough to compete on their own. This may be needed especially in a developing nation that is just moving into the world economy, but care must be taken not to prolong the support. Other options besides tariffs or quotas may work better to help the industry develop. Show Answer Correct Answer: A) All are true. 3. Which of the following is not a part ofconstructing international trade policy? A) Protectionism. B) Strategic Trade Policy. C) Autarky. D) Free Trade Policy. Show Answer Correct Answer: C) Autarky. 4. Which union sets-up the basic rules of trade and settles trade disputes between countries? A) OPEC. B) EU. C) WTO. D) NAFTA. Show Answer Correct Answer: C) WTO. 5. ASEAN is the same trading entity as AFTA A) Yes. B) No. Show Answer Correct Answer: B) No. 6. Countries that trade without tarrifs or quotas engage in ..... A) Fair trade. B) Far trade. C) Free trade. D) No trade. Show Answer Correct Answer: C) Free trade. 7. It shows that the goods meet the required standards prior to shipment. A) CERTIFICATION OF QUALITY. B) CERTIFICATE OF INSPECTION. C) CERTIFICATE OF ORIGIN. D) None of above. Show Answer Correct Answer: B) CERTIFICATE OF INSPECTION. 8. The imposition of a tariff on imported good by a small country results in net national welfare loss because of the A) Loss in consumer surplus exceeds gain in producer surplus. B) Efficiency losses due to production and consumption distortions. C) Loss in consumer surplus exceeds gain in government revenue. D) Efficiency loss due to production and consumption distortions exceed the terms of trade gain. Show Answer Correct Answer: B) Efficiency losses due to production and consumption distortions. 9. (adv) constantly, continuously A) Slightly. B) Steadily. C) Upwards. D) Downward. Show Answer Correct Answer: B) Steadily. 10. International trade is the exchange of goods and services inside a country. A) True. B) False. Show Answer Correct Answer: B) False. 11. Classical mercantilism is the most offensive form of mercantilism because A) It promotes international trade through colonialization. B) It promotes international trade through strengthening of local industries. C) It promotes the use of a more subtle forms of protectionist policy in international trade. D) It promotes heavy investment in foreign lands. Show Answer Correct Answer: A) It promotes international trade through colonialization. 12. Countries get involved in International Trade A) To import goods they cannot produce for themselves. B) To export surplus produce they cannot sell on the domestic market. C) To develop stronger international relations with other countries. D) All of the above. E) None of the above. Show Answer Correct Answer: D) All of the above. 13. The price paid for the use of borrowed money. A) Interest. B) Interrest. C) Interest. D) Interest. Show Answer Correct Answer: A) Interest. 14. Stage 1 in product cycle model is know as new product phase and only produced and consumed only in the innovating country. A) True. B) False. Show Answer Correct Answer: A) True. 15. In Mercantilism theory, trade surplus condition is a situation where: A) Export = Import. B) Export > Import. C) Import < Export. D) Holding of gold/silver. Show Answer Correct Answer: B) Export > Import. 16. All business activities needed to create, ship, and sell goods and services across national borders are considered to be A) Domestic business. B) International business. C) Global dependency. D) None of these. Show Answer Correct Answer: B) International business. 17. ..... includes both visible and invisible items. A) Balance of payment. B) Balance of Trade. C) Foreign Trade. D) None of these. Show Answer Correct Answer: A) Balance of payment. 18. When countries make intensive use of locally scarce factors, they should ..... that product. A) Import. B) Export. C) Produce. D) Specialize. Show Answer Correct Answer: A) Import. 19. When our exports exceed our imports, we have a..... A) Trade balance deficit. B) Trade surplus. C) Free trader. D) Accord commercial. Show Answer Correct Answer: B) Trade surplus. 20. In 2012, the United States Commerce Department announced that it would impose a tax ranging from 2.9% to 4.7% on Chinese made solar panels. A) Tariff. B) Embargo. C) Quota. D) None of above. Show Answer Correct Answer: A) Tariff. ← PreviousNext →Related QuizzesInternational Economics QuizzesEconomics QuizzesInternational Trade Quiz 1International Trade Quiz 2International Trade Quiz 3International Trade Quiz 4International Trade Quiz 5International Trade Quiz 6International Trade Quiz 7International Trade Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books