This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 12 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Labor, human capital, entrepreneurship, natural resources, and capital are examples of which of the following? A) Economy. B) Factors of production. C) Absolute superiority. D) Business. Show Answer Correct Answer: B) Factors of production. 2. A limit on the quantity or the value of a commodity that can be brought into a country is called a(n): A) Tax Barrier. B) Tariff. C) Imoirt Quota. D) Quality Control. Show Answer Correct Answer: C) Imoirt Quota. 3. When a nation is skilled in the production of a commodity it is called..... When a country is skilled in the production of a commodity it is called..... A) Comparative AdvantageComparative Advantage. B) Full beneficial benefit. C) Absolute ProfitAbsolute Profit. D) None of these None of the given. Show Answer Correct Answer: C) Absolute ProfitAbsolute Profit. 4. If a firm increases its output in the ..... and unit costs ....., then the firm is experiencing ..... of scale. A) Long run; decrease; diseconomies. B) Short run; decrease; diseconomies. C) Long run; decrease; economies. D) Long run; increase; economies. Show Answer Correct Answer: C) Long run; decrease; economies. 5. What is meant by profits from international trade according to the law of comparative advantage? A) Increasing the wealth of a country. B) Increase profits from international trade. C) Increases the opportunity cost of producing goods or services. D) Increase the relative price of commodities. E) Increase the cost of producing goods or services. Show Answer Correct Answer: A) Increasing the wealth of a country. 6. Which institution is called an 'accessible credit window'? A) International Finance Corporation (IFC) International Finance Corporation. B) International Monetary Fund (IMF) International Monetary Fund. C) International Bank for Reconstruction and Development (IBRD) International Bank for Reconstruction and Development. D) International Development Authority (IDA) International Development Bank. Show Answer Correct Answer: D) International Development Authority (IDA) International Development Bank. 7. The earliest statement of the principle comparative advantage is associated with A) Bertil Ohlin. B) David Ricardo. C) Adam Smith. D) Eli Heckscher. Show Answer Correct Answer: B) David Ricardo. 8. Foreign trade deficit A) Increase in the country's export of goods and services over import of goods and services. B) Increase in the country's import of goods and services over export of goods and services. C) The balance of the current operations and capital movement number of the balance sheet. D) None of above. Show Answer Correct Answer: B) Increase in the country's import of goods and services over export of goods and services. 9. Overtime, economic interdependence of nations has: A) Diminished. B) Cannot say. C) Remained unchanged. D) Grown. Show Answer Correct Answer: D) Grown. 10. One possible opportunity for a business as a consequence of globalisation is: A) Able to sell products successfully in all foreign markets without changing the products. B) Able to increase prices as there will be less competition. C) More likely to be able to create a monopoly. D) Able to buy a wider range of imported materials and products. Show Answer Correct Answer: D) Able to buy a wider range of imported materials and products. 11. Tariff is a specification of a maximum amount of commodities which maybe imported into a country in any period of time. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 12. Import and Export of service are known as ..... A) Nominal trade. B) Invisible trade. C) Visible trade. D) None of the above. Show Answer Correct Answer: B) Invisible trade. 13. Which of the following is NOT the advantages of international trade? A) Increase world output. B) Depletion of country's reserves. C) Sharing the knowledge and technology. D) Relationship between trading partners. Show Answer Correct Answer: B) Depletion of country's reserves. 14. Which of the following protectionist measures will not raise the price for consumers? A) Subsidies. B) Quotas. C) Administrative Barriers. D) Tariff. Show Answer Correct Answer: A) Subsidies. 15. The Federal Reserve keeps a measure of the international value of the dollar A) Foreign Exchange Rate. B) Protective Market. C) Flexible Rate of Exchange. D) Trade Weighted Value of a Dollar. Show Answer Correct Answer: D) Trade Weighted Value of a Dollar. 16. During the Cold War, developing countries could: A) Find no way to benefit from the superpower struggle. B) Benefit by playing the USSR against the U.S. C) Suffer and only watch the conflict that never involved them. D) Never change sides and benefit from military aid. Show Answer Correct Answer: B) Benefit by playing the USSR against the U.S. 17. If two nations specialize according to the law of comparative advantage and then trade with each other, which of the following would be true? A) A smaller number of goods would be available in each trading nation. B) Total world production of goods would be decrease. C) Everyone within each nation would be better off. D) Each nation would increase its consumption possibilities. E) One nation would gain at the expense of the other nation. Show Answer Correct Answer: D) Each nation would increase its consumption possibilities. 18. International trade has promoted interdependence of nations A) False. B) True. Show Answer Correct Answer: B) True. 19. What is hyperinflation? A) Deflation. B) Inflation. C) A situation in which prices rise very fast. D) None of above. Show Answer Correct Answer: C) A situation in which prices rise very fast. 20. Which result would you expect from a U.S. import quota on automobiles? A) More foreign automobiles flowing into the US. B) Lower automobile prices for US consumers. C) Higher automobile prices for US consumers. D) Fewer domestic jobs in the automobile industry. Show Answer Correct Answer: C) Higher automobile prices for US consumers. 21. The redistribution effect of an import tariff is the transfer of income from the domestic: A) Buyers to the domestic government. B) Producers to domestic buyers of the good. C) Government to the domestic buyers. D) Buyers to domestic producers of the good. Show Answer Correct Answer: D) Buyers to domestic producers of the good. 22. An economic or military measure put in place to punish another country A) Sanction. B) Embargo. C) Strike. D) Tariff. Show Answer Correct Answer: A) Sanction. 23. ..... is the ability of a nation or region to produce more of a certain product. A) Absolute Advantage. B) Factors of Production. C) Capital. D) Comparative Advantage. Show Answer Correct Answer: D) Comparative Advantage. 24. A problem with a fixed exchange rate is that if it is set too low A) It will slow exports. B) It will reduce imports. C) It will increase the level of debt a government must pay back. D) It will force up interest rates. Show Answer Correct Answer: C) It will increase the level of debt a government must pay back. 25. The specifications that products must meet for various purposes such as health, safety or compliance are called? A) Standard. B) Embargo. C) Rates. D) License. Show Answer Correct Answer: A) Standard. 26. When a currency loses value, we say it has A) Depreciated. B) Gotten stronger. C) Appreciated. D) Exchanged. Show Answer Correct Answer: A) Depreciated. 27. An agreement among the United States, Canada and Mexico designed to remove tariff barriers between the three countries. A) NAFTA. B) ASEAN. C) EU. D) None of above. Show Answer Correct Answer: A) NAFTA. 28. Turkey trades textiles, food products, and building materials to Germany in exchange for German machinery, technology, and cars. This trade is possible because A) Neither country has an absolute advantage in any good. B) Each country has comparative advantage in different goods. C) The countries are forced to trade with each other. D) Both countries share comparative advantage in the same goods. Show Answer Correct Answer: B) Each country has comparative advantage in different goods. 29. Which of the following is NOT a Criticism of Adam Smith's Theory of International Trade: A) Backward countries do not sell their surplus produce in foreign markets but are constrained to export despite domestic shortages. B) It failed to explore in any comprehensive manner the factors influencing trade between two or more countries. C) It assumes that each exporting country has an absolute cast advantage in the production of a specific commodity. D) It was too elementary. Show Answer Correct Answer: D) It was too elementary. 30. The current account in the balance of payment consists of ..... ? A) Good and service account and current transfer. B) Current transfer, direct investment and portfolio investment. C) Goods and service account, income account and current transfer. D) Income, current transfer, other investment and errors and omissions. Show Answer Correct Answer: B) Current transfer, direct investment and portfolio investment. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 3International Economics Quiz 4International Economics Quiz 5International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books