This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 131 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 131 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Suppose an isolated economy has an equ ilibrium price that is less than the world price. If the economy opens to trade, then A) The country will stop producing. B) The country will become an exporter. C) Consumer surplus will increase. D) The world price will decrease to the economy's equilibrium price. E) Domestic consumers will increase consumption. Show Answer Correct Answer: B) The country will become an exporter. 2. United States, Canada, and Mexico are part of what trade agreement which ensures that most goods shipped among the three countries are not subject to tariffs or other barriers to international trade? A) NAFTA. B) GATT. C) WTO. D) AND. Show Answer Correct Answer: A) NAFTA. 3. The facility of home delivery of goods is generally provided by A) Wholesaler. B) Retailer. C) Agent. D) Manufacturer. Show Answer Correct Answer: B) Retailer. 4. A nation that imports more than it exports has a trade ..... A) Problem. B) Surplus. C) Deficit. D) Venture. Show Answer Correct Answer: C) Deficit. 5. What prompted the U.S. to change its trade strategy? A) The rapid rise of developing economies. B) The protection of developing economies. C) The shift from democratic to republican government. D) None of above. Show Answer Correct Answer: A) The rapid rise of developing economies. 6. What is standars? A) Tax on imports to protect businesses in the country, make the import more expensive, cost is passed to consumers. B) The price of one nation's currency in terms of another nation's currency. C) Rules about the quality of imported goods; if imported goods do not pass a nation's standard they will not be accepted. D) None of above. Show Answer Correct Answer: C) Rules about the quality of imported goods; if imported goods do not pass a nation's standard they will not be accepted. 7. A country experienced a deficit on its trade in goods, income and current transfers. Overall, it had a surplus on the current account of its balance of payments. What must this mean? A It had a floating exchange rate. B It had a surplus on its trade in services. C It had a surplus on the government's budget. D It was a developing country. A) A. B) B. C) C. D) D. Show Answer Correct Answer: B) B. 8. From an economic perspective, countries that export will benefit, among others ..... A) Increase self-confidence. B) Expand employment. C) Master the needs of society. D) Increase transportation costs. Show Answer Correct Answer: B) Expand employment. 9. How is an export subsidy by a large country different from an import quota by a large country? A) An export subsidy worsens terms of trade while an import quota improves them. B) Unlike the welfare effects of an import quota, the welfare effects of an export subsidy are ambiguous. C) An export subsidy improves terms of trade while an import quota worsens them. D) They are not different The effects on income distribution are the same. Show Answer Correct Answer: B) Unlike the welfare effects of an import quota, the welfare effects of an export subsidy are ambiguous. 10. Which of the following best defines a multinational corporation? A) A company that exports to many countries. B) A large company that imports from many countries. C) A company that operates in many different countries. D) A company that produces goods and services for a large market. Show Answer Correct Answer: C) A company that operates in many different countries. 11. What is the difference between imports and exports? A) Imports and exports are the same thing. B) Imports are goods and services sold, while exports are goods and services brought in. C) Imports are goods and services brought in, while exports are goods and services sold. D) Imports are only goods, while exports are only services. Show Answer Correct Answer: C) Imports are goods and services brought in, while exports are goods and services sold. 12. The international agency that administers trade agreements and settles trade disputes is: A) The World Trade Organization. B) The United Nations. C) The North American Free Trade Agreement. D) The General Agreement on the Tariffs and Trade. Show Answer Correct Answer: A) The World Trade Organization. 13. Country competitiveness affects an MNE's location selection and industry selection. For example, Nike chose China because it benefits from cheap labor and abundant resources needed for its production. A) True. B) False. Show Answer Correct Answer: A) True. 14. The currencies of different countries are bought and sold in the A) Flexible exchange market. B) Foreign exchange market. C) Flexible rate market. D) Foreign rate market. Show Answer Correct Answer: B) Foreign exchange market. 15. Product life cycle theory was introduced by A) Michael Porter. B) David Ricardo. C) Adam Smith. D) Raymond Vernon. Show Answer Correct Answer: D) Raymond Vernon. 16. Which one of the following policies is likely to be used to correct a deficit on the current account of the balance of payments A) Increase expenditure. B) Reduce expenditure. C) Appreciate the exchange rate. D) Reduce productivity. Show Answer Correct Answer: B) Reduce expenditure. 17. Trade improves A) Living Standards. B) Healthcare. C) Education. D) Government. Show Answer Correct Answer: A) Living Standards. 18. When a tariff is imposed on a good, A) Domestic producers lose. B) Domestic consumers lose. C) Foreign producers gain. D) Domestic workers lose. Show Answer Correct Answer: B) Domestic consumers lose. 19. Which of these items is an example of a visible export from Ireland A) Insurance policies. B) Pharmaceutical products. C) Niall Horan touring in England. D) Ed Sheeran touring in Ireland. Show Answer Correct Answer: B) Pharmaceutical products. 20. This ensures the imported products in the country are high quality? A) TARIFFS. B) SPECIALIZATION. C) TRADE BARRIER. D) SAFETY. Show Answer Correct Answer: D) SAFETY. ← 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