This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 29 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 29 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the economic term that describes international trade that is not controlled or affected by any legal restrictions? A) Free trade. B) Unrestricted trade. C) Mercantilism. D) Chaos. Show Answer Correct Answer: A) Free trade. 2. ..... regulate international trade between two or more nations it may cover all imports and exports, certain categories of goods, or a single category. The United States is currently engaged in some 320 trade agreements with various nations. A) Custom Union. B) Free-trade area. C) Tariff. D) Trade agreement. Show Answer Correct Answer: D) Trade agreement. 3. The theory of absolute advantage destroys the mercantilist's idea that international trade is: A) Positive-sum game. B) Negative-sum game. C) Zero-sum game. D) Win-win game. Show Answer Correct Answer: C) Zero-sum game. 4. To provide financing as well as business advisory services to Malaysian SMES A) SME CORP. B) SME BANK. C) HDC. D) TREES. Show Answer Correct Answer: B) SME BANK. 5. A country with a Trade Surplus: A) Exports more than it imports. B) Imports more than it exports. C) Has a balanced trade. D) Has a flexible exchange rate. Show Answer Correct Answer: A) Exports more than it imports. 6. Multilateral agreement regulating international trade A) GATT. B) WIPO. C) WHO. D) WTO. Show Answer Correct Answer: A) GATT. 7. Imports are no longer restricted A) Protectionism. B) Free Trade. Show Answer Correct Answer: B) Free Trade. 8. These are also known as ferry ports. A) Packet Station. B) Out Ports. C) Entrepot Ports. D) Ports of call. Show Answer Correct Answer: A) Packet Station. 9. What is the main purpose of imposing tariffs on imported goods? A) To generate revenue for the government. B) To encourage domestic consumption. C) To protect domestic industries. D) To promote international cooperation. Show Answer Correct Answer: C) To protect domestic industries. 10. A ready-to-use business that allows immediate operation is A) Joint venture. B) Company. C) Turnkey. D) Strategic alliance. Show Answer Correct Answer: C) Turnkey. 11. A country has a fixed exchange rate. What is likely to result in a deterioration in its balance of payments? A a decrease in interest rates in foreign countries B a decrease in the country's interest rates C a decrease in the country's National IncomeD an increase in the income of foreign countries A) A. B) B. C) C. D) D. Show Answer Correct Answer: B) B. 12. An exchange rate is A) The price of one currency in terms of another currency. B) The price of goods around the world. C) The price of a good in terms of another good. D) The discount that companies take when goods are returned. E) The quantity of a good to be traded for a unit of another good. Show Answer Correct Answer: A) The price of one currency in terms of another currency. 13. Suppose two countries are each capable of individually producing two given commodities. Instead, each specializes by producing the commodity for which it has a comparative advantage and then trades with the other country. Which of the following is most likely to result? A) The two countries will become more independent of each other. B) Unemployment will increase in one country and decrease in the other. C) There will be more efficient production in one country but less efficient production in the other. D) Both countries will be better off. Show Answer Correct Answer: D) Both countries will be better off. 14. Why is it easier to identify the costs than the benefits of international trade? A) Because the costs are often more visible than the benefits. B) Because the benefits are often more visible than the costs. C) Because the costs are directly borne by consumers. D) Because the benefits are only enjoyed by businesses. Show Answer Correct Answer: A) Because the costs are often more visible than the benefits. 15. Spend some time driving in Detroit, MI-the Motor City-and you're sure to see bumper stickers with messages like "Buy American" or "Out of a job yet? Keep buying foreign!" or "Hungry? Eat your foreign car!" Explain these bumper stickers in light of what you've learned:Who is hurt most by imported automobiles? A) American (domestic) consumers. B) American (domestic) car manufacturers. C) Foreign consumers. D) Foreign car manufacturers. Show Answer Correct Answer: B) American (domestic) car manufacturers. 16. GATT now been replaced by ..... A) EU. B) WTO. C) MATRADE. D) INTEL. Show Answer Correct Answer: B) WTO. 17. What is the main reason behind introducing Euro as common currency A) Promotes economic sovereignty. B) Protect business from currency fluctuations. C) Allow free movement of people. D) None of the above. Show Answer Correct Answer: B) Protect business from currency fluctuations. 18. What is a benefit of specialization in trade? A) Reduced availability of goods. B) Increased efficiency and higher production. C) Limited consumer choices. D) Equal distribution of resources. Show Answer Correct Answer: B) Increased efficiency and higher production. 19. An international payment method in which payments are made between a buyer and a seller in which the buyer receives the goods sent by the exporter and then makes payment at the end of the agreed credit period. The credit term can be of fixed duration-30 days, 60 days, 90 days, etc. A) Cash in advance. B) Letter of credit. C) Bill of exchange. D) Open account. Show Answer Correct Answer: D) Open account. 20. The activity of selling goods from within the country to abroad A) Impor. B) Export. C) Importer. D) Exporter. Show Answer Correct Answer: B) Export. ← 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