This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 206 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 206 (14 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Country Z is both a producer and an importer of cloth. Which of the following will happen if the government of Country Z imposes a tariff on cloth and the country continues to import some cloth from abroad? A) There will be a decrease in domestic producer surplus. B) There will be an increase in the quantity demanded for cloth. C) As the country produces more cloth, there will be an efficiency gain for the economy. D) There will be a decrease in consumer surplus for domestic consumers. E) The domestic consumption of cloth will increase. . Show Answer Correct Answer: D) There will be a decrease in consumer surplus for domestic consumers. 2. Which of the following is NOT a possible reason why trade is particularly important to SIngapore? A) Singapore has a small population. B) Singapore lacks natural resources. C) Singapore has a skiiled and educated workforce. D) Singapore needs to develop its economy to feed its population. Show Answer Correct Answer: C) Singapore has a skiiled and educated workforce. 3. In the Ricardian model, ..... is the only factor of production. A) Technology. B) Cash. C) Labor. D) Natural resource. Show Answer Correct Answer: C) Labor. 4. What is the FDI? A) Plays development investment. B) Federal direct investment. C) Franchising direct investment. D) Foreign direct investment. Show Answer Correct Answer: C) Franchising direct investment. 5. What is the main difference between domestic trade and international trade? A) Use of local currencies to pay for goods and services. B) Use of foreign currencies to pay for goods and services. C) Use of barter system for trade. D) Use of cryptocurrencies for trade. Show Answer Correct Answer: B) Use of foreign currencies to pay for goods and services. 6. Why do countries specialize in certain products when they trade A) Unequal distribution of resources and specialization. B) The ability to produce more of a given product than someone else. C) The ability of a country to produce a good at a lower opportunity cost than another country can. D) To concentrate their efforts on producing a few goods and services instead of everything they need. Show Answer Correct Answer: D) To concentrate their efforts on producing a few goods and services instead of everything they need. 7. Which of the following is the best example of a bilateral trade agreement? A) MERCOSUR. B) World Bank. C) Canada-Israel Free Trade Agreement. D) USMCA. Show Answer Correct Answer: C) Canada-Israel Free Trade Agreement. 8. True or False:The Heckscher-Ohlin theory predicts that countries will export those goods that make intensive use of locally abundant factors while importing goods that make intensive use of locally scarce factors. A) True. B) False. Show Answer Correct Answer: A) True. 9. Which of the following describes the modern trade theories? A) The major theories of international trade advanced before the mid-20th century:mercantilism, absolute advantage, comparative advantage, and factor endowments. B) The major theories of international trade advanced in the second half of the 20th century:product life cycle, strategic trade, and national competitive advantage. C) The aggregation of importing and exporting leads to the country-level trade surplus or deficit. D) A theory that holds that the wealth of the world (measured in gold and silver) is fixed and that a nation that exports more and imports less would enjoy the net inflows of gold and silver and thus become richer. Show Answer Correct Answer: B) The major theories of international trade advanced in the second half of the 20th century:product life cycle, strategic trade, and national competitive advantage. 10. If the pound is described as strong who benefits? A) Exporting businesses. B) Small businesses. C) Importing businesses. D) Large businesses. Show Answer Correct Answer: C) Importing businesses. 11. Which of these country is NOT a member of ASEAN? A) Cambodia. B) China. C) Laos. D) Brunei. Show Answer Correct Answer: B) China. 12. If a consignment is moved to a foreign country, the ..... acts as an exporter or shipper. A) Customs. B) Buyer. C) Consignor. D) Customer. Show Answer Correct Answer: C) Consignor. 13. The Uruguay Round dragged on for seven years before an agreement was reached December 15, 1993. A) True. B) False. Show Answer Correct Answer: A) True. 14. It is also known as invisible trade. A) Foreign Investment. B) GATT. C) International Trade. D) Service Trade. Show Answer Correct Answer: D) Service Trade. ← PreviousRelated 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