This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 171 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 171 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What does NAFTA stands for? A) North American Free Trade Agreement. B) North American Fair Trade Agreement. C) North American Free Trade Alliance. D) North American Fair Trade Alliance. Show Answer Correct Answer: A) North American Free Trade Agreement. 2. What type of advantage shows who can make the most item? A) Absolute advantage. B) Comparative advantage. Show Answer Correct Answer: A) Absolute advantage. 3. All are the basic methods of payment could then be listed as follows:except A) Cash in advance. B) Letter of credit. C) Documentary collection. D) Bank remittance. E) Loan. Show Answer Correct Answer: E) Loan. 4. In which stage of the international product life cycle does the innovating firm's country become a net importer of the product? A) New product stage. B) Maturing product stage. C) Standardized product stage. D) Declining product stage. Show Answer Correct Answer: C) Standardized product stage. 5. Explain the difference between trade deficits and trade surpluses. A) Trade deficit and trade surplus are the same thing. B) Trade deficit occurs when a country's imports and exports are equal, while trade surplus occurs when a country's imports and exports are unequal. C) Trade deficit occurs when a country's imports exceed its exports, while trade surplus occurs when a country's exports exceed its imports. D) Trade deficit occurs when a country's exports exceed its imports, while trade surplus occurs when a country's imports exceed its exports. Show Answer Correct Answer: C) Trade deficit occurs when a country's imports exceed its exports, while trade surplus occurs when a country's exports exceed its imports. 6. In 2 hours, Vietnam can produce either 100 kgs of rice or 40 pairs of shoes. What is the opportunity cost of rice production? A) 2.5 pairs of shoes. B) 0.4 kgs of rice. C) 2.5 kgs of rice. D) 0.4 pairs of shoes. Show Answer Correct Answer: D) 0.4 pairs of shoes. 7. What is the most direct means of correcting a deficit in the balance of payments? A) Increasing government spending. B) Increasing exports. C) Increasing foreign investments. D) Reducing imports. Show Answer Correct Answer: D) Reducing imports. 8. Which of the following is a key benefit of international trade? A) Increased competition leading to higher prices. B) Reduction in global economic inequality. C) Decreased availability of goods and services. D) Greater reliance on domestic production only. Show Answer Correct Answer: B) Reduction in global economic inequality. 9. Balance of trade is measuredas: A) Dfference between import and export of goods. B) Difference between import and export of services. C) Difference between import and export of capital. D) Difference betwee all import and all export. Show Answer Correct Answer: A) Dfference between import and export of goods. 10. The purpose of establishing the WTO is..... A) Increase trade between ASEAN member countries. B) Encourage more openness to world trade. C) European integration by establishing economic cooperation. D) Fighting for economic interests in the Asia Pacific region. Show Answer Correct Answer: B) Encourage more openness to world trade. 11. What is an example of a trade agreement? A) North American Free Trade Agreement (NAFTA). B) World Trade Organization (WTO). C) United Nations Convention on Contracts for the International Sale of Goods (CISG). D) International Monetary Fund (IMF). Show Answer Correct Answer: A) North American Free Trade Agreement (NAFTA). 12. Provide information on policies, incentives and facilities to start on operation either in the Manufacturing or Services Sector in Malaysia A) SME Corp. B) MSI. C) MIDF. D) WHAT. Show Answer Correct Answer: D) WHAT. 13. Opponents of free trade often argue that trade with other countries destroys domestic jobs. If you are a proponent of free trade, what would your argument be? A) Free trade creates jobs in the industries we have a comparative advantage. B) Free trade allows the society to enjoy a higher standard of living as a whole. C) Workers that lost their jobs because of free trade will eventually find jobs in the industries we have comparative advantage. D) All of the above are good arguments for free trade. Show Answer Correct Answer: D) All of the above are good arguments for free trade. 14. According to the principle of comparative advantage, two nations (or individuals) can trade bananas successfully as long as they don't have the same ..... A) Type of Bananas. B) Opportunity Cost of Producing Bananas. C) Attitude toward the worth of a Banana. D) None of above. Show Answer Correct Answer: B) Opportunity Cost of Producing Bananas. 15. The gravity model postulates that, other things equal, the ..... (and the more equal in size) and the ..... the 2 countries are, the ..... the volume of trade between them is expected to be. A) Larger, further, larger. B) Larger, closer, larger. C) Smaller, further, larger. D) Larger, closer, smaller. Show Answer Correct Answer: B) Larger, closer, larger. 16. In International Trade, Banks facilitate/play a role in the following except ..... A) Flow of Goods. B) Flow of Payment. C) Flow of Documents. D) Payment Guarantee. Show Answer Correct Answer: A) Flow of Goods. 17. National Security and Domestic Product are two reasons for Trade Barriers. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 18. How do import quotas and export subsidies impact international trade? A) They promote free trade and global economic growth. B) They encourage competition and market access for all countries. C) They can distort trade and create unfair advantages for certain countries or industries. D) They have no impact on international trade. Show Answer Correct Answer: C) They can distort trade and create unfair advantages for certain countries or industries. 19. What is the potential impact of increased production of exports? A) Decreased working hours and increased leisure time. B) Conservation of non-renewable resources. C) Reduced pollution and environmental damage. D) Increased working hours and depletion of resources. Show Answer Correct Answer: D) Increased working hours and depletion of resources. 20. What is the term for a group of producers who regulate the production, pricing, and marketing of a particular product? A) Cartel. B) NAFTA. C) EU. D) APEC. Show Answer Correct Answer: A) Cartel. ← 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