This quiz works best with JavaScript enabled. Home > Economics > International Economics > International Trade > International Trade – Quiz 68 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 68 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Comparative advantage explains why a nation will benefit from trade when: A) It exports more than it imports. B) Its trading partners are experiencing offsetting losses. C) It exports goods for which it is a high-opportunity cost producer, while importing those for which it is a low-opportunity cost producer. D) It exports goods for which it is a low-opportunity cost producer, while importing those for which it is a high-opportunity cost producer. Show Answer Correct Answer: D) It exports goods for which it is a low-opportunity cost producer, while importing those for which it is a high-opportunity cost producer. 2. It refers to an economy's ability to produce goods and services at a lower opportunity cost than its trade partners than other producers. A) Factor endowments. B) Competitive advantage. C) Firm strategy. D) Comparative advantage. Show Answer Correct Answer: D) Comparative advantage. 3. An international trade agreement among the United States, Canada, and Mexico. A) Customization. B) World Trade Organization (WTO). C) Foreign direct investment (FDI). D) North American Free Trade Agreement (NAFTA). Show Answer Correct Answer: D) North American Free Trade Agreement (NAFTA). 4. What country imports more than any other country in the world? A) United States. B) Japan. C) Russia. D) Mexico. Show Answer Correct Answer: A) United States. 5. If you sell goods abroad then you are called..... A) Export. B) Impor. C) Transfer. D) Exporter. Show Answer Correct Answer: D) Exporter. 6. Insurance is..... A) The value of the object of insurance and expressed in monetary terms. B) Insured property, life and health of citizens, and non-material interests that are not against the law. C) Actions aimed at transferring or mitigating any future risks. D) A legal document regulating the insurance relationship between the insurer and the insured. Show Answer Correct Answer: C) Actions aimed at transferring or mitigating any future risks. 7. GATT was made in the year A) 1945. B) 1947. C) 1950. D) 1951. Show Answer Correct Answer: B) 1947. 8. Trade creation and trade diversion may result from the creation of a trading bloc. Trade creation refers to the idea that ..... while trade diversion means that ..... A) Lower cost producers are replaced by higher cost producers / higher cost producers are replaced by lower cost producers. B) Higher cost producers are replaced by lower cost producers / lower cost producers are replaced by higher cost producers. C) Trade expands through more exports and imports / trade contracts through fewer exports and imports. D) Imports from efficient producers are replaced by imports from inefficient producers / imports from inefficient producers are replaced by imports from efficient producers. Show Answer Correct Answer: B) Higher cost producers are replaced by lower cost producers / lower cost producers are replaced by higher cost producers. 9. Trade carried out by two countries to meet each other's needs is called..... A) International trade. B) Multilateral trade. C) Regional trade. D) Bilateral trade. Show Answer Correct Answer: D) Bilateral trade. 10. What is the emotional argument for government intervention in international trade? A) To prevent unemployment. B) To protect domestic industries. C) To preserve cultural identity. D) To further foreign policy goals. Show Answer Correct Answer: C) To preserve cultural identity. 11. We have a ..... amount of food we don't need. A) Surplus. B) Export. C) Percent. D) Steel mill. Show Answer Correct Answer: A) Surplus. 12. Which of these can be barriers to international Trade? A) No of staff a company has. B) Advertising and Branding. C) Economic sanctions, trade restrictions, legal and regulatory systems. D) Trading with the USA. Show Answer Correct Answer: C) Economic sanctions, trade restrictions, legal and regulatory systems. 13. In the Ricardian model, we can show that trade enlarges a country's consumption possibilities, which implies ..... A) Gain from trade. B) Loss from trade. C) Strength of trade. D) Weakness of trade. Show Answer Correct Answer: A) Gain from trade. 14. Which of the following statements best describes trade between two nations? A) It is mutually beneficial. B) It is legally required. C) It avoids specialization. D) It involves low cost for both nations. Show Answer Correct Answer: A) It is mutually beneficial. 15. If the world price of steel is lower than the domestic price in the U.S. will our country be an importer or exporter of steel when trade is permitted? A) Importer. B) Exporter. Show Answer Correct Answer: A) Importer. 16. This document is a guarantee that payment will be made when the seller meets the conditions sale. A) LETTER OF CREDIT. B) LETTER OF INSURANCE. C) LETTER OF SALES CONDITION. D) None of above. Show Answer Correct Answer: A) LETTER OF CREDIT. 17. Quantitative tax concerned with the amount of goods rather than the value of the goods A) To value. B) Specific Tariff. C) Sales. D) Income. Show Answer Correct Answer: B) Specific Tariff. 18. According to the method of payment as cheque payment, what are the role of banks? A) (A) Money transfer. B) (B) Document handling. C) (C) Payment guarantee. D) Only (A). E) Only (A) & (B). Show Answer Correct Answer: D) Only (A). 19. Theory of comparative advantage was given by ..... A) A. Philip Kotler. B) B. Adam Smith. C) C. Peter Drucker. D) Mr. David Ricardo. Show Answer Correct Answer: D) Mr. David Ricardo. 20. If Brazil has a comparative advantage in producing rubber, and trade of rubber is allowed ..... A) Brazil will become an importer of rubber. B) Brazil will become an exporter of rubber. C) Brazil could become either an exporter or importer. D) It is impossible to determine whether Brazil will become an importer or an exporter of rubber without additional information about rubber prices. Show Answer Correct Answer: B) Brazil will become an exporter of rubber. ← 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