This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 22 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The U.S. limits the amount of wool suits that Macedonia can ship to the U.S. A) Embargo. B) Tariff. C) Subsidy. D) Quota. Show Answer Correct Answer: D) Quota. 2. Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant. A) Theory of Comparative Advantage. B) Ricardo's Theory. C) New Trade Theory. D) Heckscher-Ohlin theory. Show Answer Correct Answer: D) Heckscher-Ohlin theory. 3. The United States increases its imports from Europe. What will be the effects on relative value of the Dollar and the Euro on the currency exchange market? A) The relative values of the dollar and euro will appreciate. B) The relative value of the dollar will depreciate and the euro will appreciate. C) The relative value of the dollar will appreciate and the euro will depreciate. D) The relative values of the dollar and euro will depreciate. Show Answer Correct Answer: B) The relative value of the dollar will depreciate and the euro will appreciate. 4. What did Swedish economists Eli Heckscher and Bertil Ohlin identify as a determinant of advantage in trade? A) Technology. B) Labor and capital. C) Government policies. D) Consumer demand. Show Answer Correct Answer: B) Labor and capital. 5. According to the letter of credit, what are the role of banks? A) (A) Money transfer. B) (B) Document handling. C) (C) Payment guarantee. D) (D) Setting seller's and buyer's obligations. E) Only (A), (B) & (C). Show Answer Correct Answer: E) Only (A), (B) & (C). 6. Why have US gas prices gone down considerably? A) Trade with Saudi Arabia. B) Trade with Mexico. C) The US has become more efficient at producing our own gasoline. D) Using comparative advantage with Russia. Show Answer Correct Answer: C) The US has become more efficient at producing our own gasoline. 7. What is a multinational company (MNC)? A) A corporation that operates in multiple countries and has a completely autonomous management system. B) A company that operates in only one country and has a decentralized management system. C) A company that operates in multiple countries but has no centralized management system. D) A corporation that operates in multiple countries and has a centralized management system. Show Answer Correct Answer: D) A corporation that operates in multiple countries and has a centralized management system. 8. A trade barrier utilized by countries may be A) Tariffs (taxes) on certain imports. B) Placing quotas on certain imports. C) The outright restriction of certain imports. D) All of these. Show Answer Correct Answer: D) All of these. 9. The danger of trade dependency is that ..... A) It often leads to the exploitation of developed countries. B) Political turmoils in a country might affect all dependent countries. C) The countries involved in trade often get into rivalry over trade tariff issues. D) ) it is difficult to end trade activities with current trade partners and find new trade partners. Show Answer Correct Answer: B) Political turmoils in a country might affect all dependent countries. 10. How are INCOTERMS in 2010 different from those in 2000? A) There are additional conditions from before. B) Same as before, changing the meaning of some conditions. C) Reduce conditions. D) Increase the severity of the liability. Show Answer Correct Answer: C) Reduce conditions. 11. Assume that all nations have low tariffs. Each country freely buys and sells to other countries. However, as a result of a rise in nationalism, each country imposes high tariffs. Which of the following would likely occur? A) Interdependence between nations will stay the same. B) Interdependence between nations will decrease. C) Standard of living in both nations will increase. D) Interdependence between nations will increase. Show Answer Correct Answer: B) Interdependence between nations will decrease. 12. The role of the enterprise's service activity is to provide after-sale service and support. A) True. B) False. Show Answer Correct Answer: A) True. 13. Merchant A) Daredevil. B) Bargaining. C) Gift. D) Trader. Show Answer Correct Answer: D) Trader. 14. What does WTO stand for? A) World Trade Organisation. B) World Telecoms Organisation. C) We Trade Oranges. D) World Tarriff Office. Show Answer Correct Answer: A) World Trade Organisation. 15. How does inflation rate affect currency value/exchange rate? A) Higher inflation leads to depreciating currency & vice versa. B) Increasing inflation leads to more favourable exchange rates. C) Higher inflation leads to currency appreciation. D) Lower inflation leads to more favourable exchange rate. Show Answer Correct Answer: A) Higher inflation leads to depreciating currency & vice versa. 16. To focus on producing one thing or specific product and to improve productivity is known as: A) Specialization. B) International trade. C) Absolute Advantage. D) Supply and Demand. Show Answer Correct Answer: A) Specialization. 17. What is exchange rates? A) Tax on imports to protect businesses in the country, make the import more expensive, cost is passed to consumers. B) The price of one nation's currency in terms of another nation's currency. C) Simply the difference between the value of exports and value of imports. D) None of above. Show Answer Correct Answer: B) The price of one nation's currency in terms of another nation's currency. 18. A trade agreement between approximately 28 countries. The participating countries agree to use the Euro as their currency, open their borders and have free trade. A) North American Trade Agreement. B) European Union. Show Answer Correct Answer: B) European Union. 19. Free trade refers to a situation where a government does not try to influence what its citizens can buy from global markets. A) True. B) False. Show Answer Correct Answer: A) True. 20. The government's policy of reducing the value of the domestic currency relative to foreign currency is called..... A) Inflation. B) Deflation. C) Appreciation. D) Devaluation. Show Answer Correct Answer: D) Devaluation. ← 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