This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 201 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 201 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Absolute advantage theory points out the followings except A) Superior production capablities of a country. B) A country can produce particular goods at a lower cost than another country. C) Sees opportunity cost as a factor of analysis in choosing between different options for production diversification. D) Looks at the efficiency of producing a single product. Show Answer Correct Answer: C) Sees opportunity cost as a factor of analysis in choosing between different options for production diversification. 2. What year did Netflix expand from being a U.S.-only company to streaming in 50 different countries? A) 2010. B) 2007. C) 2020. D) 2014. Show Answer Correct Answer: A) 2010. 3. What principle or theory argues that it is in a country's best interests to maintain a trade surplus? A) Principle of Mercantilism. B) Heckscher-Ohlin Theory. C) Product Life Cycle Theory. D) None of above. Show Answer Correct Answer: A) Principle of Mercantilism. 4. Into what did European countries enter because of good economic relations? A) National reserve bank. B) General commitment. C) Trade war. D) Monetary union. Show Answer Correct Answer: D) Monetary union. 5. Comparative advantages can influence, but do not fully determine, a nation's competitiveness. A) True. B) False. Show Answer Correct Answer: A) True. 6. The international product life cycle theory stresses that A) Countries ought to turn out and export merchandise which are well endowed and import merchandise which is in brief provide. B) A corporation can begin to export its product and later battle foreign direct investment because the product moves through its life cycle. C) A country ought to specialize merchandise including comparative, or relative price, advantage compared with different countries and import comparative disadvantage merchandise. D) A country that has absolute advantage produces larger output than countries who have an equivalent quantity of resources. Show Answer Correct Answer: B) A corporation can begin to export its product and later battle foreign direct investment because the product moves through its life cycle. 7. What would a positive or negative balance of trade say about the economy of a country A) Balance of payment. B) In debt. C) Trade restriction. D) The value of their currency. Show Answer Correct Answer: D) The value of their currency. 8. ..... payments as soon as they're due and charge interest on late payments. A) Cherish. B) Request. C) Chase. D) Settle. Show Answer Correct Answer: C) Chase. 9. Which of the following is NOT one of the main instruments of tradepolicy? A) Tariffs. B) Credit Portfolios. C) Local content requirement. D) Administrative Policies. Show Answer Correct Answer: B) Credit Portfolios. 10. Which of the following is best defined as the policy that decreases the costs ofbringing products to markets throughout the world by lowering or eliminating tariffsand deregulating? A) Free trade policy. B) Monetary Policy. C) Protectionist trade policy. D) Regulatory policy. Show Answer Correct Answer: A) Free trade policy. 11. What is thought to be a benefit of global free trade? A It increases the opportunity for domestic producers to specialise. B It increases the protection for domestic producers. C It reduces a country's reliance on other countries. D It reduces the transport costs involved in trading. A) A. B) B. C) C. D) D. Show Answer Correct Answer: A) A. 12. An advantage of international trade:International trade, which is the exchange of goods and services between countries (i.e. imports and exports), can give countries access to resources and products they otherwise wouldn't be able to use-countries can export goods in order to import the things they can't produce themselves. For example, the UK exports goods so that it can import things such as tea, rice and diamonds. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 13. Boost exports A) Boost exports. B) Develop exports. C) Plus exports. D) Overall exports. Show Answer Correct Answer: A) Boost exports. 14. In an FTA between US, Canada and Mexico, the best option for Canada is to: A) Immediately join the agreement with the US. B) Join the agreement later, letting Mexico join first. C) Join a three-country trade agreement. D) None of above. Show Answer Correct Answer: B) Join the agreement later, letting Mexico join first. 15. If some industries exhibit internal (firm specific) increasing returns to scale in each country, we should not expect to see A) Intra-industry trade between countries. B) Perfect competition in these industries. C) Inter-industry trade between countries. D) High levels of specialization in both countries. Show Answer Correct Answer: B) Perfect competition in these industries. 16. What are tariffs and trade barriers? A) Tariffs are subsidies given to imported goods, while trade barriers refer to any measures that promote international trade. B) Tariffs are taxes imposed on exported goods, while trade barriers refer to any measures that promote international trade. C) Tariffs are taxes imposed on imported goods, while trade barriers refer to any measures that restrict or limit international trade. D) Tariffs are taxes imposed on imported goods, while trade barriers refer to any measures that promote international trade. Show Answer Correct Answer: C) Tariffs are taxes imposed on imported goods, while trade barriers refer to any measures that restrict or limit international trade. 17. Saudi Arabia has large crude oil reserves, and Bangladesh has a large pool of skilled workers. These are both examples of ..... A) Factor endowments. B) Economies of scope. C) Production factors. D) Opportunity costs. Show Answer Correct Answer: A) Factor endowments. 18. Since NAFTA was established, unions have primarily focused on which concern? A) Environment. B) Jobs. C) Wages. D) Working conditions. Show Answer Correct Answer: B) Jobs. 19. Multinational companies are typically large companies. What problems can occur? A) Easy to communicate. B) Communication becomes more difficult. C) The communication costs decrease and profits increase. D) The business can become successful. Show Answer Correct Answer: B) Communication becomes more difficult. 20. American and Japanese workers can each produce 4 cars a year. An American worker can produce 10 tons of grain a year, whereas a Japanese worker can produce 5 tons of grain a year. To keep things simple, assume that each country has 100 million workers. Which country has a comparative advantage in producing cars? A) America. B) Japan. C) None. D) None of above. Show Answer Correct Answer: B) Japan. ← 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