This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is Trade agreements? A) Trade agreements are when two or more nations agree on the terms of trade between them. B) Trade agreements determine the tariffs or taxes and duties countries impose on imports and exports. C) For this reason when most people say trade agreements they mean international trade agreements. D) 1 & 3. E) 1, 2 & 3. Show Answer Correct Answer: E) 1, 2 & 3. 2. The ideal goal of international trade A) International Trade. B) International Relation. C) Globalization. D) Balance of Trade. Show Answer Correct Answer: D) Balance of Trade. 3. What does a trademark protect? A) An invention. B) A work of art. C) Logos, names and brands. D) The look, shape and feel of a product. E) A secret formula. Show Answer Correct Answer: C) Logos, names and brands. 4. Explain how Documentary Credit works under Al-Murabahah contract: A) Al-Murabahah i.e. DC issued on "cost plus" basis, where the supplier and manufacturer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The supplier and manufacturer acts as an agent of the bank as far as the goods are concerned. B) Al-Murabahah i.e. DC issued on "cost plus" basis, where the exporter will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The exporter acts as an agent of the bank as far as the goods are concerned. C) Al-Murabahah i.e. DC issued on "cost plus" basis, where the importer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The importer acts as an agent of the bank as far as the goods are concerned. D) All the above. Show Answer Correct Answer: C) Al-Murabahah i.e. DC issued on "cost plus" basis, where the importer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The importer acts as an agent of the bank as far as the goods are concerned. 5. Which factor is country risk? A) Sale contract is incomplete or incorrect. B) Changes in Government policies. C) A bank's ability to settle its debts for reasons other than country risk. D) Goods are not insured properly. Show Answer Correct Answer: B) Changes in Government policies. 6. The situation in which two or more governmentscharge tax on the same income or property: A) Enforcement. B) Double taxation. C) Investment. D) International agreement. Show Answer Correct Answer: B) Double taxation. 7. If nations specialize according to their comparative advantage and engage in trade with each other, each nation can: A) Consume beyond its ability to produce. B) Produce beyond its ability to produce. C) Shift its production possibilities curve to the left. D) Produce more of all goods. Show Answer Correct Answer: A) Consume beyond its ability to produce. 8. Which of the following are results of tariffs and quotas? A) Reducing trade surpluses. B) Protecting foreign industry. C) Smothering third-world development. D) Increasing prices consumers pay for goods. Show Answer Correct Answer: D) Increasing prices consumers pay for goods. 9. With the establishment of WHO, entry requirements of domestic countries to MNCs are not followed. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 10. There are 7 important concepts in PAB. The concept that involves the establishment of trading blocs and agreement on export and import matters is the concept ..... A) Emerging market. B) South-south. C) Borderless world. D) Globalization. Show Answer Correct Answer: C) Borderless world. 11. Commercial impulses A) Boost trades. B) Coutertrade. C) Trade drives. D) Counter purchase. Show Answer Correct Answer: C) Trade drives. 12. Tariffs (or taxes on imported goods) ..... A) All are true. B) The most commonly used trade barrier. C) Have an indirect effect beyond just basic supply and demand concepts. Since the foreign country supplying the import will sell less, their economy will decline. D) Creates a decline in domestic consumption as the desired goods are now at a higher price than consumers are willing to pay, an increase in domestic production as suppliers will be able to receive a higher price for the goods,. E) Create a decline in imports which was the whole point of the tariff, and tariff revenue accruing to the domestic government. Show Answer Correct Answer: A) All are true. 13. Due to increased cross border trade and investments, countries are no more ..... A) Related. B) Isolated. C) Trading. D) Helpful. Show Answer Correct Answer: B) Isolated. 14. If a good is imported into a (large) country H from country F, then the imposition of a tariff in country H A) Raises the price of the good in both countries. B) Raises the price in country H and cannot affect its price in country F. C) Lowers the price of the good in both countries. D) Raises the price of the good in H and lowers it in F. Show Answer Correct Answer: D) Raises the price of the good in H and lowers it in F. 15. When the dollar "falls" compared to other currencies, this means A) It takes more dollars to equal a unit of foreign currency. B) It takes fewer dollars to equal a unit of foreign currentcy. C) The value of a unit of foreign currency is harder to measure dollars. D) The value of a dollar is harder to measure, compared to foreign currencies. Show Answer Correct Answer: A) It takes more dollars to equal a unit of foreign currency. 16. Which of the following will be the lowest barrier on imports of $ 300 digital cameras? A) An ad-valorem 5% tariff. B) A specific $ 10 tariff. C) A quota that raises the internal price of the cameras by 5%. D) A compound duty of $ 5 and 1%. Show Answer Correct Answer: D) A compound duty of $ 5 and 1%. 17. A tax put on goods that are imported into a country. A) Subsidy. B) Quota. C) Embargo. D) Tariff. Show Answer Correct Answer: D) Tariff. 18. They are imposed after an investigation finds that a foreign country subsidizes its exports, injuring domestic producers in the importing country. A) Countervailing duties. B) Special duties and non tariff regulations. C) Mixed duties. D) Ad valorem duties. Show Answer Correct Answer: A) Countervailing duties. 19. An entity that mines resources in China, manufactures goods in Austria, and markets thesegoods in Japan is probably a A) Multinational corporation. B) Multinational cartel. C) Multinational custom union. D) Multinational monopoly. Show Answer Correct Answer: A) Multinational corporation. 20. Bribe and kickbacks discourage foreign firms to expand to new territories. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. ← PreviousNext →Related QuizzesInternational Economics QuizzesEconomics QuizzesInternational Trade Quiz 1International Trade Quiz 3International Trade Quiz 4International Trade Quiz 5International Trade Quiz 6International Trade Quiz 7International Trade Quiz 8International Trade Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books