This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 25 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. ..... strategy enacted by governments and central banks to keep economic growth stable, along with price levels and unemployment. A) Exchange rate. B) Industrialization. C) Stabilization. D) Protectionist policy. Show Answer Correct Answer: C) Stabilization. 2. Comparative advantage:Because each nation has limited natural resources, a country must weigh its best options or ..... when using natural resources to produce a particular good or service for export A) Opportunity costs. B) Government structure. C) Military strength. D) All of the above. Show Answer Correct Answer: A) Opportunity costs. 3. The British pound, the yen, and the euro are examples of ..... A) Exchange rates. B) Currencies. C) Tariffs. D) Quotas. Show Answer Correct Answer: B) Currencies. 4. If you travel to a foreign country, buy an ice cream cone at a street stall, and pay with a credit card (which has a foreign currency settlement function), is this behavior considered international trade? A) Calculate. B) Doesn't count. Show Answer Correct Answer: A) Calculate. 5. What is the purpose of a voluntary export restraint (VER)? A) To restrict the quantity of a good that may be imported. B) To encourage exports by imposing a lower tariff. C) To limit the use of antidumping laws. D) To protect domestic producers from unfair foreign competition. Show Answer Correct Answer: D) To protect domestic producers from unfair foreign competition. 6. A policy where the government removes barriers to export and import activities is called..... A) Free trade. B) Interregional trade. C) General trading. D) International trade. Show Answer Correct Answer: A) Free trade. 7. What is one reason the United States might impose a high tariff on furniture manufactured in China? A) To pay for domestic reforestation programs. B) To raise revenue for the government. C) To protect the domestic furniture industry and its jobs. D) To sell more furniture to China. Show Answer Correct Answer: C) To protect the domestic furniture industry and its jobs. 8. Why is the exchange of goods and services a necessary characteristic of a specialised economy? A) Specialisation is not possible unless trade takes place. B) Specialisation is not affected by trade. C) Specialisation is only possible through government intervention. D) Specialisation is only possible through self-sufficiency. Show Answer Correct Answer: A) Specialisation is not possible unless trade takes place. 9. How do trade barriers impact consumers? A) They increase the price of imported goods. B) They decrease the price of imported goods. Show Answer Correct Answer: A) They increase the price of imported goods. 10. Strategic alliances does not allow firms to share the fixed costs (and associated risks) of developing new products or processes. A) True. B) False. Show Answer Correct Answer: B) False. 11. What is the primary goal of the World Trade Organization (WTO)? A) To promote environmental conservation. B) To regulate international currency exchange rates. C) To facilitate international trade and resolve trade disputes. D) To provide humanitarian aid to developing countries. Show Answer Correct Answer: C) To facilitate international trade and resolve trade disputes. 12. Which country in CPTPP is Vietnam's largest textile and garment export market (2019)? A) Canada. B) Japan. C) Australia. D) Malaysia. Show Answer Correct Answer: B) Japan. 13. Which is not an item in the "cut and sew" rule? A) Women's bra. B) Coat. C) Children's clothing made of synthetic fibers. D) Suitcases and bags. Show Answer Correct Answer: B) Coat. 14. Country's total amount of exports minus the total amount of imports A) Tariff. B) Foreign Exchange Rate. C) Balance of Payments. D) Balance of Trade. Show Answer Correct Answer: D) Balance of Trade. 15. What do countries achieve when engaging in trade? A) Economies of Sales. B) Economies of Scale. C) Economies of Scraps. D) Economies of Scrolls. Show Answer Correct Answer: B) Economies of Scale. 16. Specialization increases A) Interdependence. B) Specialization. C) Comparative advantage. D) Productivity. Show Answer Correct Answer: D) Productivity. 17. This is less aggressive why do firms expand internationally and often reactionary tactics in response to changing conditions that must be adapted to order to protect and hold a firm's market power or competitive position ..... A) MARKET MOTIVE. B) DEFENSIVE MOTIVES. C) ECONOMIC MOTIVE. D) STRATEGIC MOTIVE. Show Answer Correct Answer: B) DEFENSIVE MOTIVES. 18. Define riba and its application in Islamic banking A) The literal translation of the word "riba" is "decrease" or "deficit" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. B) The literal translation of the word "riba" is "increase" or "excess" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. C) The literal translation of the word "riba" is "increase" or "excess" , which is applicable under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of not sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. D) 1 & 3. E) All the above. Show Answer Correct Answer: B) The literal translation of the word "riba" is "increase" or "excess" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. 19. Which of the following is not an argument against trade protection? A) In most cases, consumers lose. B) Trade protections reduce efficiency. C) Foreign producers are worse off. D) Trade protection reduces government revenue. Show Answer Correct Answer: D) Trade protection reduces government revenue. 20. Why is it difficult to determine comparative advantages between just two countries in today's global economy? A) Because many goods have inputs from multiple factories in different countries. B) Because goods are often not perfectly identical and consumers are willing to pay more for higher quality. C) Because countries do not specialize in producing the good with the lowest opportunity cost. D) Because perfect information about prices, costs, and productivity of all goods and services in large global markets is almost impossible to obtain. Show Answer Correct Answer: A) Because many goods have inputs from multiple factories in different countries. ← 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