This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 113 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 113 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Permitting another party in a foreign country to produce and sell goods under your trademarks, patents or copyrights in exchange of fee is known as ..... A) Franchising. B) Licensing. C) Import. D) Export. Show Answer Correct Answer: B) Licensing. 2. The diagram shows the value of a country's exports and imports of goods over five years.Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5 A) A. B) B. C) C. D) D. Show Answer Correct Answer: C) C. 3. The movement of people from one country to another is called ..... A) National migration. B) International migration. C) Immigration. D) Emigration. Show Answer Correct Answer: B) International migration. 4. It is a theory that a country enjoys a comparative advantage and has greater productivity which means technological difference. A) Absolute advantage. B) Recardian Theory. C) Comparable advantage. D) Comparison advantage. Show Answer Correct Answer: B) Recardian Theory. 5. This theory is attributed to philosopher John Rawls. A) Righteous moralist. B) Justice theories. C) Right theories. D) None of above. Show Answer Correct Answer: B) Justice theories. 6. Initiator of the theory of absolute advantage A) Adam smith. B) David ricardo. C) John smit. D) None of above. Show Answer Correct Answer: A) Adam smith. 7. Which of the following is not a potential consequence of trade protection? A) Higher costs of production because of higher prices of imported inputs. B) Lower export competitiveness because of higher costs of production. C) Lower risk of retaliation by other countries. D) Potential for corruption, for example illegal smuggling. Show Answer Correct Answer: C) Lower risk of retaliation by other countries. 8. What is absolute advantage in international trade? A) A country's ability to produce a good or service more efficiently than another country. B) A country's ability to produce a good or service without considering efficiency. C) A country's ability to produce a good or service at the same efficiency as another country. D) A country's ability to produce a good or service less efficiently than another country. Show Answer Correct Answer: A) A country's ability to produce a good or service more efficiently than another country. 9. Factor endowment is..... A) The amount of change that patterns of trade undergo over time. B) The degree to which the government allows free trade to exist in its international trade. C) The extent to which different countries possess various factors of production. D) The cost of pursuing one activity at the expense of another given alternative activity. Show Answer Correct Answer: C) The extent to which different countries possess various factors of production. 10. Its purpose is to reduce trade barriers and promote international trade. A) Free trade Agreement. B) General Agreement on Tariffs and Trade. C) General Agreement on Trade in Services. D) Preferential Trade Agreements. Show Answer Correct Answer: B) General Agreement on Tariffs and Trade. 11. The transaction method used for making payments between countries; thesimultaneous act of buying one currency and selling the other A) International Finance. B) Trade Failure. C) Currency. D) Foreign Exchange. Show Answer Correct Answer: D) Foreign Exchange. 12. Which of the following will lead to a decrease in a nation's money supply? A) A decrease in income tax rates. B) A decrease in the discount rate. C) An open market purchase of government securities by the central bank. D) An increase in reserve requirements. E) An increase in government expenditures on goods and services. Show Answer Correct Answer: D) An increase in reserve requirements. 13. The value that one currency has compared to another currency is called exchange rate A) True. B) False. Show Answer Correct Answer: A) True. 14. Who or what answers the basic economic questions in a command economy? A) Individuals and Businesses. B) Government. C) Individuals, Businesses, and Government. D) None of above. Show Answer Correct Answer: B) Government. 15. Goods and services are produced in one's home country. A) Import. B) Domestic good. C) Exchange. D) None of above. Show Answer Correct Answer: B) Domestic good. 16. When a country allows trade and becomes an exporter of a good A) Producer surplus from that good rises and consumer surplus from that good falls. B) Producer and consumer surplus from that good rise. C) Producer and consumer surplus from that good fall. D) Producer surplus from the good falls, and consumer surplus from that good rises. Show Answer Correct Answer: A) Producer surplus from that good rises and consumer surplus from that good falls. 17. The correct statement regarding International Trade is..... A) There is nothing that specifically regulates the terms of delivery of goods. B) Administrative management tends to be easier. C) Terms of delivery of goods from the seller to the buyer are stated in Incoterms. D) The payment system is in IDR currency. Show Answer Correct Answer: C) Terms of delivery of goods from the seller to the buyer are stated in Incoterms. 18. It was reported in 2011 that the United States (US) needed to achieve a lower current account deficit. What would help this in the short run? A a protectionist policy B a strong exchange rate C increased private sector spending D investment in the US by multinational firms A) A. B) B. C) C. D) D. Show Answer Correct Answer: A) A. 19. What is one of the primary benefits of international trade? A) Increased tariffs and trade barriers. B) Reduced economic growth. C) Expansion of markets and increased access to goods and services. D) Limited cultural exchange. Show Answer Correct Answer: C) Expansion of markets and increased access to goods and services. 20. Banks use the major portion of the deposits to ..... A) Extend loans. B) Invest in infrastructure. C) Deposit in foreign banks. D) None of the above. Show Answer Correct Answer: A) Extend loans. ← 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