This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 168 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 168 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The US President signed a trade agreement which allowed more duty-free access to the US market for Latin American and Caribbean countries. Who might benefit in the short run from this agreement? A Caribbean countries, because they may export to Latin America. B Latin American businesses, because they may be able to sell more in the US. C Latin American governments, because they will not have to pay so much duty.D The US, because it may export more to Latin America. A) A. B) B. C) C. D) D. Show Answer Correct Answer: B) B. 2. One advantage of free trade is: A) It allows Australians to live and work in every country. B) Australian businesses can ignore local business laws. C) The government's approval ratings improve. D) It improves efficiency in resource allocation. Show Answer Correct Answer: D) It improves efficiency in resource allocation. 3. Which is not true about balance of trade and balance of payment A) The balance of trade is the official term for net exports that makes up the balance of payments. B) Balance of trade records only cross-border exchange of services, income and financial assets. C) Balance of payment records exports and imports, cross-border exchange or services, income and financial assets. D) A country's balance of trade is defined by its net exports (exports minus imports) and is thus influenced by all the factors that affect international trade. Show Answer Correct Answer: B) Balance of trade records only cross-border exchange of services, income and financial assets. 4. What is meant by a depreciation in the foreign exchange rate? A) The government intervenes to reduce the exchange rate of the country's currency. B) The rate of exchange of exports for imports for a country deteriorates. C) The rate of inflation in a country continues to rise. D) The value of a country's currency falls on the international exchange market. Show Answer Correct Answer: D) The value of a country's currency falls on the international exchange market. 5. A country that concentrates on producing and selling one particular product demonstrates this concept A) Specialization. B) Quotas. C) Absolute advantage of trade. D) Cartel. Show Answer Correct Answer: A) Specialization. 6. Which statement BEST reflects the impact on domestic consumers of tariffs and quotas? A) Tariffs raise prices on exports, while quotas set limits on imports. B) Tariffs raise prices on imports, while quotas set limits on exports. C) Tariffs raise prices on exports, while quotas set limits on exports. D) Tariffs raise prices on imports, while quotas set limits on imports. Show Answer Correct Answer: D) Tariffs raise prices on imports, while quotas set limits on imports. 7. Which region is likely to experience increased production and consumption of global commodities, goods, and services in the context of spatial distribution? A) Western Europe. B) Oceania, including Australia and New Zealand. C) BRICS nations, including Brazil, Russia, India, China, and South Africa. D) North America. Show Answer Correct Answer: C) BRICS nations, including Brazil, Russia, India, China, and South Africa. 8. Who is the world's largest importer? A) US. B) Canada. C) China. D) UK. Show Answer Correct Answer: A) US. 9. Determine which country has the comparative advantage:The US can produce 20 planesFrance can produce 12 planes A) US. B) France. C) Both US and France. D) None of above. Show Answer Correct Answer: A) US. 10. According to the Standard Trade Model exposited in the text, the offer of a subsidy on the export good by the Home country A) Increase the relative supply of cloth from RSI to RS2. B) Reduces the relative demand of cloth from RD1 to RD2. C) The relative price of cloth and the terms of trade falls from (PC/PF)1 to (PC/PF)2. D) All of the above. Show Answer Correct Answer: D) All of the above. 11. When a country imposes a tax on imported goods, it is known as: A) Subsidy. B) Quota. C) Tariff. D) Embargo. Show Answer Correct Answer: C) Tariff. 12. The international business as it exists today is to a great extent the result of ..... specialization. A) Geographical. B) Product. C) Occupational. D) None of these. Show Answer Correct Answer: A) Geographical. 13. What is an advantage to a country of free trade? A greater international diversification of production B greater range of domestically produced goods C greater reliance on other countries D greater specialisation in the use of resources A) A. B) B. C) C. D) D. Show Answer Correct Answer: D) D. 14. Ever since ..... published The Wealth of Nations in 1776, the vast majority of economists have accepted the proposition that free trade among nations improves overall economic welfare. A) Adam Smith. B) Karl Marx. C) Max Weber. D) Paul Adams. Show Answer Correct Answer: A) Adam Smith. 15. Which of the following situations would encourage the European Union to put tariffs on imports? A) The EU wants to increase global trade by encouraging imports. B) The EU discovers that the growth of imports is causing workers to lose jobs. C) The EU hopes to provide its citizens with more diverse global goods. D) The EU notices that citizens are paying too much for imported goods. Show Answer Correct Answer: B) The EU discovers that the growth of imports is causing workers to lose jobs. 16. 5/ What is the primary goal of countries engaging in international trade due to specialization driven by external economies? A) To achieve self-sufficiency. B) To increase competition within their borders. C) To maximize production costs. D) To improve overall economic welfare. Show Answer Correct Answer: D) To improve overall economic welfare. 17. What are trade barriers? A) Taxes imposed on domestic goods and services. B) Agreements between countries to promote free trade. C) Government subsidies for domestic industries. D) Government-imposed restrictions on the flow of goods and services between countries. Show Answer Correct Answer: D) Government-imposed restrictions on the flow of goods and services between countries. 18. What is the term for the country in which a company that makes an investment into a foreign company is based? A) Inflow. B) Home country. C) Host country. D) Joint venture. Show Answer Correct Answer: B) Home country. 19. What term refers to the movement of people and ideas across borders, resulting in cultural exchange? A) International integration. B) Containerization. C) Globalization. D) Cultural diffusion. Show Answer Correct Answer: D) Cultural diffusion. 20. MNCs: ..... GPNs: ..... A) Marketing National Cooperatives and Global Produce Networking. B) Multinational Companies and General Production Networks. C) Multinational Corporations and Global Production Networks. D) Marketing Corporations and Global Productivity Networking. Show Answer Correct Answer: C) Multinational Corporations and Global Production Networks. ← 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