This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 197 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 197 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which two of the following are arguments used by critics of free trade?a) Free trade does not take into consideration productivity differences between countries b) Free trade may lead to unemployment c) Free trade often ignores the effects of monopoly elements on consumer welfare d) Free trade can only work within trading blocs e) Free trade reduces international specialization A) And e). B) And c). C) And c). D) And e). Show Answer Correct Answer: B) And c). 2. Exchange rates show the value of one country's currency in relation to other countries' ..... A) Exports. B) Quotas. C) Currencies. D) Tariffs. Show Answer Correct Answer: C) Currencies. 3. Shipping allows timber products companies to expand their business growth and their ability to stay competitive in marketing their niche products in the long run. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 4. Which of the following situations would allow agents to gain from specialization and trade with one another? A) The terms of trade are between the two agents' opportunity costs. B) The agents have the same opportunity costs. C) One agent has absolute advantage in both goods. D) One agent has comparative advantage in both goods. E) Either agent has absolute advantage in either of the goods. Show Answer Correct Answer: A) The terms of trade are between the two agents' opportunity costs. 5. Purpose:To prevent too much of a good from entering a country A) Quota. B) Tariff. C) Embargo. D) None of above. Show Answer Correct Answer: A) Quota. 6. When you state the price of a nation's currency in the terms of another nation, it is called what? A) Foreign exchange rate. B) Foreign exchange balance. C) Foreign exchange credit. D) None of above. Show Answer Correct Answer: A) Foreign exchange rate. 7. When a country looks at the opportunity cost to produce an item and chooses to produce those things they can make better than other nations. A) Comparative advantage. B) Absolute advantage. C) Trade advantage. D) None of above. Show Answer Correct Answer: A) Comparative advantage. 8. The North American Free Trade Agreement has resulted in the loss of many American jobs and a decline in trade. A) True. B) False. Show Answer Correct Answer: B) False. 9. SAFTA came into existence in year ..... A) 2006. B) 1996. C) 1986. D) 1976. Show Answer Correct Answer: A) 2006. 10. If I am better at all types of production, I have the ..... in all forms of prodcution. A) Comparative Advantage. B) Absolute Advantage. C) Specialization. D) Developed nation. Show Answer Correct Answer: B) Absolute Advantage. 11. I would be grateful if you could let me have a detailed ..... including prices and delivery terms. A) Quotation. B) Term. C) Offer. D) Order. Show Answer Correct Answer: B) Term. 12. A key to trading is specialization. Which of the following in an incorrect association between a country and what they specialize in producing. A) Saudi Arabia-oil. B) Honduras-bananas. C) Japan-electronic devices. D) All the above are correct associations between a country and what they specialize in producing. Show Answer Correct Answer: D) All the above are correct associations between a country and what they specialize in producing. 13. A U.S. auto manufacturer plans to relocate plant operations to Mexico as a result of the North American Free Trade Agreement (NAFTA). Which criticism of free trade agreements would be based on this relocation? A) The demand for U.S. automobiles will decrease. B) The cost for producing U.S. automobiles will increase. C) U.S. automotive designers will have to create more efficient cars. D) U.S. automotive factory workers will have to compete with foreign workers. Show Answer Correct Answer: D) U.S. automotive factory workers will have to compete with foreign workers. 14. What is the purpose of free trade agreements? A) To minimize risks. B) To reduce barriers to imports and exports between countries. C) To control international trade. D) To impose trade restrictions. Show Answer Correct Answer: B) To reduce barriers to imports and exports between countries. 15. What is the principle that states should specialize in trading goods that they produce with the greatest relative efficiency and at the lowest relative cost? A) Balance of trade. B) Autarky. C) Comparative advantage. D) Protectionism. Show Answer Correct Answer: C) Comparative advantage. 16. What are quotas? A) Quantitative limit on the sale of a local good in an economy. B) Quantitative limit on the sale of a foreign good in an economy. C) Unlimited sale of a foreign good in an economy. D) None of above. Show Answer Correct Answer: B) Quantitative limit on the sale of a foreign good in an economy. 17. On way in which a government can intervene in order to maintain the value of a falling exchange rate is to A) Sell its foreign exchange reserves. B) Purchase foreign exchange for its reserves. C) Reduce domestic interest rates. D) Increase domestic inflation. Show Answer Correct Answer: A) Sell its foreign exchange reserves. 18. Japan's leading commodity A) Goat. B) Rice. C) Mobil. D) Cheese. Show Answer Correct Answer: C) Mobil. 19. When the economies of multiple countries rely on each other, it is called A) Economic interdependence. B) A mutual partnership. C) Isolationism. D) A unified trading block. Show Answer Correct Answer: A) Economic interdependence. 20. The U.S. requires that all imported goods be marked with the name in English of its country of origin A) Tariff. B) Quota. C) Standard. D) Subsidy. E) Embargo. Show Answer Correct Answer: C) Standard. ← 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