This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 48 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 48 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In the Product Life Cycle, this is the stage wherein product sales drop significantly, and consumer behavior changes. The company's product loses more and more market share, and competition tends to cause sales to deteriorate. A) Introduction Stage. B) Growth Stage. C) Maturity Stage. D) Decline Stage. Show Answer Correct Answer: D) Decline Stage. 2. Ensures cheapest prices for consumers A) Protectionism. B) Free Trade. Show Answer Correct Answer: B) Free Trade. 3. How do you do? A) How are you?. B) What's up, mate?. C) How do you do?. D) What do you do?. Show Answer Correct Answer: C) How do you do?. 4. Exceptions made between participating countries in regional economic integration, among others, aim to: A) Carry out trade liberalization. B) Strengthening political allies. C) Reneging on international commitments at the WTO. D) Nothing is true. Show Answer Correct Answer: A) Carry out trade liberalization. 5. What impact might a $ 5 billion investment by a European business in Kenya have an economic growth in Keya? A) More employment and GDP will increase. B) Less resources used. C) More poverty will spread. D) More illiteracy will create. Show Answer Correct Answer: A) More employment and GDP will increase. 6. What is the rational strategy for Australia to promote economic growth and higher living standards? A) Producing for the world market. B) Isolating itself from international trade. C) Reducing exports to focus on domestic consumption. D) Imposing heavy tariffs on imports. Show Answer Correct Answer: A) Producing for the world market. 7. Which country can join CPTPP? A) Developing country. B) Country which is recommended by member. C) Any country. D) Country which have agreement of all members. Show Answer Correct Answer: D) Country which have agreement of all members. 8. Which economic theory argues that a country should focus on exporting goods it can produce most efficiently and import goods it cannot produce efficiently? A) Mercantilism. B) Comparative advantage. C) Protectionism. D) Absolute advantage. Show Answer Correct Answer: B) Comparative advantage. 9. All countries in the world have to trade with each other because of differences in specialization and technological know how, climate and A) Raw materials. B) Natural resources. C) Weather. D) Goods. Show Answer Correct Answer: B) Natural resources. 10. Our dependence on foreign oil still causes concerns in many sectors because if the supply was disrupted for any reason, it could cause severe supply shocks in the economy. A) True. B) False. Show Answer Correct Answer: A) True. 11. Which term refers to the total value of a country's exports and imports of goods and services? A) Trade surplus. B) Current account deficit. C) Gross Domestic Product (GDP). D) Balance of payments. Show Answer Correct Answer: D) Balance of payments. 12. Sophie and Lily are two individuals on Paradise Island. If Sophie has an absolute advantage, then A) Sophie's production possibility frontier will have a steeper slope than Lily's. B) The two production possibility frontiers will overlap. C) The two production possibility frontiers will intersect at a unique point. D) Sophie's production possibility frontier will be upward sloping. E) Sophie's production possibility frontier will be above and to the right of Lily's. Show Answer Correct Answer: E) Sophie's production possibility frontier will be above and to the right of Lily's. 13. What does the theory of comparative advantage assume about perfect information? A) It assumes that countries produce identical goods. B) It assumes that technology remains constant. C) It assumes that every country should specialize in producing the good with the lowest opportunity cost. D) It assumes that everyone has the same knowledge of prices and quantities in the market at the same time. Show Answer Correct Answer: D) It assumes that everyone has the same knowledge of prices and quantities in the market at the same time. 14. Nations trade because there is uneven distribution or availability of economic resources (land, labor, capital, and entrepreneurial abilities. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 15. What is necessarily involved in international free trade? A the absence of transport costs B the gift of foreign aid from charities C the supply of zero interest rate government loans D the unrestricted exchange of goods and services A) A. B) B. C) C. D) D. Show Answer Correct Answer: D) D. 16. The opposite of trade protectionism would be ..... A) Free trade. B) The trade fails. C) Surplus trade. D) All of the above. Show Answer Correct Answer: A) Free trade. 17. When did the trade war between China and the United States begin? A) On April 22, 2019. B) On March 22, 2018. C) On April 22, 2018. D) On March 22, 2019. Show Answer Correct Answer: B) On March 22, 2018. 18. Foreign competition is unfair and hurts other countries when it is based on low wages." This statement belongs to what misconception in international economics? A) Productivity and Competitiveness. B) The Pauper Labor Argument. C) Exploitation. D) Economies of Scale. Show Answer Correct Answer: B) The Pauper Labor Argument. 19. International trade provides a better flow of resources (land. labor, capital, entrepreneurial abilities). The excess supply resources could be used by other countries who needed it the most. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 20. What is likely to cause a rise in a country's foreign exchange rate? A) A fall in its exports of goods and services. B) A fall in its imports of goods and services. C) A fall in its inflow of income. D) A rise in its outflow of transfers. Show Answer Correct Answer: B) A fall in its imports of goods and services. ← 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