This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 14 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The purpose of the protectionism policy in the international trade are listed below EXCEPT A) A country should not depend on another country produce security goods. B) An increase in the value of currency will cause. C) The new industry is not ready to compete with the foreign firm. D) Creating goods relations between merchant countries. Show Answer Correct Answer: D) Creating goods relations between merchant countries. 2. What is "Engaging in trade with barriers" ? A) International Trade. B) Protectionism. C) NAFTA. D) Free Trade. Show Answer Correct Answer: B) Protectionism. 3. What does sustainable mean? A) Allows for continual reuse (maintained and supported). B) Interactions between human social system and the rest of the ecosystem. Show Answer Correct Answer: A) Allows for continual reuse (maintained and supported). 4. The price of one country's currency in terms of another country's currency A) Absolute advantage. B) Opportunity cost. C) Comparative advantage. D) Exchange rate. Show Answer Correct Answer: D) Exchange rate. 5. Any law passed to limit free trade among nations. A) Trade Barrier. B) Dumping. C) Quota. D) Embargo. Show Answer Correct Answer: A) Trade Barrier. 6. Voluntary exchange of goods or services is called a(n) ..... A) Embargo. B) Quota. C) Trade. D) Tariff. Show Answer Correct Answer: C) Trade. 7. The following are International trade theories except: A) New trade. B) Free trade. C) Comparative advantage theory. D) None of above. Show Answer Correct Answer: A) New trade. 8. 1 Euro =.9 US Dollars, if you exchange $ 1, 000 US for Euros, you would get ..... ? A) 100 euros. B) 900 euros. C) 9000 euros. D) 1000 euros. Show Answer Correct Answer: B) 900 euros. 9. To increase a variety of goods available in trade, two countries should ..... A) Remove all trade barriers. B) Increase tariffs on one another. C) Increase quotas against one another. D) Increase all trade barriers against each other. Show Answer Correct Answer: A) Remove all trade barriers. 10. When was IFM established ..... A) Sept 24, 1947. B) Jan 1, 1946. C) Jan 30, 1947. D) Dec 27, 1945. Show Answer Correct Answer: D) Dec 27, 1945. 11. International trade can have important effects on the distribution of income because A) The more powerful country dictates the terms of trade. B) Different countries use different currencies. C) Different industries employ different factors of production. D) Of government corruption. Show Answer Correct Answer: C) Different industries employ different factors of production. 12. Allows for free trade of many goods among United States, Canada, and Mexico. A) ASEAN. B) Free Trade. C) EU. D) NAFTA. Show Answer Correct Answer: D) NAFTA. 13. A situation that occurs when individuals or businesses produce a narrow range of products. A) Economic Interdependence. B) Imports. C) Specialization. D) Exports. Show Answer Correct Answer: C) Specialization. 14. Currently, the foreign exchange rate for all world currencies is A) Fixed exchange rate, based on the U.S. dollar. B) A floating exchange rate, based on the U.S. dollar. C) A fixed exchange rate, based on market forces of supply and demand. D) A floating exchange rate, based on market forces of supply and demand. Show Answer Correct Answer: D) A floating exchange rate, based on market forces of supply and demand. 15. Which of the following is usually an effect of an embargo? A) Prices fall because consumers have more options. B) Prices rise because consumers have fewer options. C) Countries benefit because open trade is encouraged. D) Smaller countries give in to the demands of larger countries. Show Answer Correct Answer: B) Prices rise because consumers have fewer options. 16. IBRD also known as ..... A) World Bank. B) EXIM Bank. C) SAARC. D) GATT. Show Answer Correct Answer: A) World Bank. 17. Most tariffs have A) Only revenue effects. B) Only protective effects. C) Both protective and revenue effects. D) Neither protective or revenue effects. Show Answer Correct Answer: C) Both protective and revenue effects. 18. The figure illustrates the international movement of capital. Nation 1 owns O1A capital stock, Nation 2 owns O2A capital stock; All capital is fully invested.Capital moved from which country to which country? A) From Nation 1 to Nation 2. B) From Nation 2 to Nation 1. C) There is no capital movement. D) Not enough information to conclude. Show Answer Correct Answer: A) From Nation 1 to Nation 2. 19. Imposing a quota on imports will ..... competition and increase demand for domestic goods. A) Decrease. B) Increase. Show Answer Correct Answer: A) Decrease. 20. Which among the following is/are an example/s of International economics theory?a) Balance of receipt theoryb) Malthusian theoryc) Heckscher-Ohlin theoryd)Peacock-Wisemen theory A) Heckscher-Ohlin theory. B) Balance of receipt theory. C) Peacock-Wisemen theory. D) Malthusian theory. Show Answer Correct Answer: A) Heckscher-Ohlin theory. 21. A regional trade organization made up of European nations A) NAFTA. B) CARICOM. C) EU. D) ASEAN. Show Answer Correct Answer: C) EU. 22. The global financial crisis of 2008-2009 temporarily slowed down globalization's progress. A) True. B) False. Show Answer Correct Answer: A) True. 23. An example of a Common Market A) NAFTA. B) ANZAC. C) CARICOM. D) EU. Show Answer Correct Answer: C) CARICOM. 24. Which trade theory contends that a country that initially develops and exports a new product may eventually become an importer of it, and may no longer manufacture the product: A) Theory of factor endowments. B) Theory of overlapping demands. C) Economies of scale theory. D) Product life cycle theory. Show Answer Correct Answer: D) Product life cycle theory. 25. In international trade there is no restriction to movement of goods and services A) True. B) False. Show Answer Correct Answer: B) False. 26. Which of the following best describes Division of labour? A) Breaking down of work into smaller units. B) Doing variety if diversified work. C) Each worker creates the final product. D) None of above. Show Answer Correct Answer: A) Breaking down of work into smaller units. 27. An economy with foreign trade is known as ..... A) A close economy. B) A planned economy. C) An open economy. D) A laissez faire economy. Show Answer Correct Answer: C) An open economy. 28. Absolute advantages refer to a country stability to produce more of the product than another country can, with the same amount of resources. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 29. What is the difference between a fixed rate exchange system and a floating rate system? A) Never changing vs always changing. B) Government sets rate vs market sets rate. C) Doesn't exist vs does exist. D) Currency never appreciates vs can appreciate. Show Answer Correct Answer: B) Government sets rate vs market sets rate. 30. Deficits in balance of payments can be solved by ..... A) Increasing government spending. B) Raising indirect taxes. C) Discouraging import. D) Lowering interest rates. Show Answer Correct Answer: C) Discouraging import. ← 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