This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 114 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 114 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A business decides to borrow money from a bank to invest in new equipment that will increase its output. This is a A) Injection, consumption. B) Leakage, investment. C) Leakage, savings. D) Injection, investment. Show Answer Correct Answer: D) Injection, investment. 2. Assuming that, In the United States it takes 5 hours of labors to produce a ton of potatoes and 10 to produce a ton of coal. In Canada, it takes 6 hours of labors to produce a ton of potatoes and 9 to produce a ton of coal. According to the theory of comparative advantage, A) The United States should export coal to Canada and import potatoes from Canada. B) The United States should export potatoes to Canada and import coal from Canada. C) The United States should import both potatoes and coal from Canada, while concentrating on production of more valuable goods. D) There would be no basis for trade. Show Answer Correct Answer: B) The United States should export potatoes to Canada and import coal from Canada. 3. Political risk also called as ..... A) Cash risk. B) Country risk. C) Contractual risk. D) Crucial risk. Show Answer Correct Answer: B) Country risk. 4. Define the collecting bank. A) Collecting bank's role is to take prompt action in forwarding the goods with the buyer's instructions to a remitting bank. The collecting bank normally chooses the remitting bank, but the buyer may specify the bank to which the documents are to be sent. The collecting bank prepares a covering forms called the collection instruction for collection order) to forward the documents to the collecting bank and for giving its instructions. B) Collecting bank's role is to take prompt action in forwarding the documents with the seller's instructions to a remitting bank. The collecting bank normally chooses the remitting bank, but the seller may specify the bank to which the documents are to be sent. The collecting bank prepares a covering schedule called the collection instruction for collection order) to forward the documents to the collecting bank and for giving its instructions. C) Collecting bank's role is to take prompt action in forwarding the goods with the seller's instructions to a remitting bank. The collecting bank normally chooses the remitting bank, but the seller may specify the bank to which the goods are to be sent. The collecting bank prepares a covering schedule called the collection instruction for collection order) to forward the goods to the collecting bank and for giving its instructions. D) All the above. Show Answer Correct Answer: B) Collecting bank's role is to take prompt action in forwarding the documents with the seller's instructions to a remitting bank. The collecting bank normally chooses the remitting bank, but the seller may specify the bank to which the documents are to be sent. The collecting bank prepares a covering schedule called the collection instruction for collection order) to forward the documents to the collecting bank and for giving its instructions. 5. An Older economic policy A) Protectionism. B) Free Trade. Show Answer Correct Answer: A) Protectionism. 6. A contract between the buyer and the seller. A) Bill of sale. B) Bill of lading. C) Invoice. D) Purchase agreement. Show Answer Correct Answer: D) Purchase agreement. 7. Government payments to a local supplier to reduce the supplier costs. This helps local businesses survive because it is getting direct aid from the federal government. What is this called? A) Balance of trade. B) Protectionism. C) Exchange rate. D) Subsidy. Show Answer Correct Answer: D) Subsidy. 8. Compared with Pakistan, Germany has a higher output of pharmaceuticals per unit of resources used. What could explain this? A the existence of floating exchange rates B the law of absolute advantage C the Marshall-Lerner condition D the terms of trade A) A. B) B. C) C. D) D. Show Answer Correct Answer: B) B. 9. According to the Buy America Act, if a company wishes to win a contract from a U.S. government agency to provide some equipment, it must ensure that at least 51 percent of the product by value is manufactured in the United States. This is an example of:contract from a U.S. government agency to provide some equipment, it must ensure that at least 51 percent of the product by value ismanufactured in the United States. This is an example of: A) Anti dumping duties. B) Import quotas. C) Voluntary export restraint. D) Local content requirements. Show Answer Correct Answer: D) Local content requirements. 10. The more trade we have with another country, the higher the unemployment rate. A) True. B) False. Show Answer Correct Answer: B) False. 11. ..... is the term used to express the economic reality of the benefits from trade that result from differences in resources and technology for individuals, businesses, or nations. A) Historical contingency. B) Comparative advantage. C) Sheer accident. D) None of above. Show Answer Correct Answer: B) Comparative advantage. 12. When a country produces only one or a few goods/services. A) Comparative advantage. B) Specialization. C) Chosen economy. D) Resource Use. Show Answer Correct Answer: B) Specialization. 13. Barriers of international trade are government laws, regulations, policies or practices that either protect ..... products from foreign competition or artificially stimulate exports of particular domestic products A) International. B) Foreign. C) Domestic. D) Business. Show Answer Correct Answer: C) Domestic. 14. What are the types of assets that foreigners are allowed to purchase in Australia? A) Shares in Australian companies, houses and land, and investment in Australian banks and finance companies. B) Shares in Australian companies, cars and boats, and investment in Australian banks and finance companies. C) Shares in Australian companies, art and collectibles, and investment in Australian banks and finance companies. D) Shares in Australian companies, jewelry and fashion, and investment in Australian banks and finance companies. Show Answer Correct Answer: A) Shares in Australian companies, houses and land, and investment in Australian banks and finance companies. 15. The concept 'terms of trade' means A) The amount of exports sold by a country. B) The price conditions bargained for in international markets. C) The price of a country's exports divided by the price of its imports. D) The quantities of imports received in free trade. Show Answer Correct Answer: C) The price of a country's exports divided by the price of its imports. 16. Globalisation is: A) The introduction of the internet to make us closer to others in the world. B) The breakdown of traditional barriers between nations through technology and transport. C) Faster travel around the world. D) The movement of people and ideas around the world. Show Answer Correct Answer: B) The breakdown of traditional barriers between nations through technology and transport. 17. A bill of lading is issued by the seller (exporter) evidencing shipment of goods. A) True. B) False. Show Answer Correct Answer: B) False. 18. Which of the following is a country that specializes in manufactured goods such as cars and electronics? A) EU. B) USA. C) Middle East. D) China. E) Japan. Show Answer Correct Answer: E) Japan. 19. ASEAN is A) Association of South East Asian Nations. B) Association of South East American Nations. C) American South East Association Nations. D) None of the above. Show Answer Correct Answer: A) Association of South East Asian Nations. 20. If higher tariffs and more restrictive quotas reduced the imports of the United States, A) U.S. employment would increase. B) Unemployment in the United States would decline. C) U.S. exports would also increase because foreigners would want to buy more from U.S. producers. D) U.S. exports would decline because foreigners would be earning fewer of the dollars needed to purchase goods and services from Americans. Show Answer Correct Answer: D) U.S. exports would decline because foreigners would be earning fewer of the dollars needed to purchase goods and services from Americans. ← 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