This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 19 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which trading bloc shares a common currency? A) North Atlantic Free Trade Agreement (NAFTA). B) European Union (EU). C) Association of Southeast Asian Nations (ASEAN). D) None of above. Show Answer Correct Answer: B) European Union (EU). 2. Balance of payments used the ..... system accounting A) Single entry. B) Accrual basis. C) Cash basis. D) Double entry. Show Answer Correct Answer: D) Double entry. 3. The fact that industrialized countries levy very low or no tariff on raw materials and semi processed goods A) Helps developing countries export manufactured products. B) Has no effect on developing country exports. C) Hurts developing country efforts to export manufactured goods. D) None of the above. Show Answer Correct Answer: C) Hurts developing country efforts to export manufactured goods. 4. If the United States experiences steady growth in GDP and low unemployment rates, what would happen in the foreign exchange market? A) US currency would depreciate. B) US currency would appreciate. Show Answer Correct Answer: B) US currency would appreciate. 5. An unfavourable movement in the terms of trade will mean that: A) A holiday to Bali will become more expensive for Australians. B) Imports are now more expensive to buy. C) The value of the Australian dollar has risen against a basket of other nations' currencies. D) Australia has to export more goods and services to purchase the same volume of imports. Show Answer Correct Answer: D) Australia has to export more goods and services to purchase the same volume of imports. 6. The Heckscher-Ohlin assumes that ..... are identical between countries. A) Tastes and preferences. B) Technology levels. C) Factor endowments. D) Both a and b. Show Answer Correct Answer: D) Both a and b. 7. Country "G" can produce 20 hamburgers or 80 hot dogs. Country "H" can produce 14 hamburgers or 28 hot dogs. What is the opportunity cost for Country "H" to produce 1 hot dog? A) 1/2 hamburger. B) 2 hamburgers. C) 3 hamburgers. D) 12 hamburgers. Show Answer Correct Answer: A) 1/2 hamburger. 8. Factor endowments refer to a nation's position in factors of production necessary to compete in a given industry. A) True. B) False. Show Answer Correct Answer: A) True. 9. Restriction to regulate international commerce is called a(n) ..... A) Trade Barrier. B) Trade. C) Free Trade. D) Subsidy. Show Answer Correct Answer: A) Trade Barrier. 10. What trade barrier is beneficial to both domestic producers AND domestic consumers of a good? A) Quota. B) Embargo. C) Subsidy. D) Tariff. Show Answer Correct Answer: C) Subsidy. 11. Ad valorem tariffs are A) The same as import quotas. B) Import taxes calculated as a fraction of the value of the imported good. C) Import taxes calculated as a fixed charge for each unit of imported goods. D) Imports taxes stated in ads industry publications. Show Answer Correct Answer: B) Import taxes calculated as a fraction of the value of the imported good. 12. A manufacturing firm based in country C buys in raw materials from country A and sells the finished goods to country B. The firm could gain if country C's currency: A) Depreciated against both other currencies. B) Depreciated against currency A but appreciated against currency B. C) Appreciated against currency A but depreciated against currency B. D) Appreciated against both currencies. Show Answer Correct Answer: C) Appreciated against currency A but depreciated against currency B. 13. A country's exports exceeds the value of its imports A) Tariff. B) Trade Deficit. C) Trade Surplus. D) Quota. Show Answer Correct Answer: C) Trade Surplus. 14. According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will: A) Devote excessive amounts of resources to agricultural production. B) Devote insufficient amounts of resources to agricultural production. C) Export products that are land-intensive. D) Import products that are land-intensive. Show Answer Correct Answer: C) Export products that are land-intensive. 15. The Heckscher-Ohlin model rules out the classical model's basis for trade by assuming that ..... is (are) identical between countries. A) Factor intensities. B) Factor endowment. C) Opportunity costs. D) Technology. Show Answer Correct Answer: D) Technology. 16. American tourists benefit when the dollar does what? A) Rises (appreciates). B) Falls (depreciates). Show Answer Correct Answer: A) Rises (appreciates). 17. An exchange rate A) Is the value of a currency relative to another currency. B) Occurs when a nation exports equal their imports. C) Is the ability to produce a product most efficiently. D) Is the ability to produce more of a given product. Show Answer Correct Answer: A) Is the value of a currency relative to another currency. 18. Tariffs and Quotas can benefit nations imposing them by ..... A) Increasing variety of goods. B) Increasing consumption. C) Lowering prices. D) Raising revenue. Show Answer Correct Answer: D) Raising revenue. 19. Tariffs are different from assigned import quotas in that tariffs will A) Restrict imports. B) Hurt domestic producers of goods facing import competition. C) Benefit domestic consumers of imported goods. D) Generate additional revenue for the domestic government. E) Increase the price of imported goods. Show Answer Correct Answer: D) Generate additional revenue for the domestic government. 20. ..... refers to the ability of a country in producing a particular goods and services at lower opportunity cost as compared to other countries A) Comparative advantages. B) Different advantage. C) Absolute advantage. D) Mutual advantages. Show Answer Correct Answer: A) Comparative advantages. 21. What three counties make up NAFTA? A) U.S., China, and Mexico. B) U.S., United Kingdom, and China. C) U.S. Canada, and Mexico. D) U.S., Canada, China. Show Answer Correct Answer: C) U.S. Canada, and Mexico. 22. International trade applies ..... models to help understand the international economy while international finance applies ..... models to help understand the international economy. A) Analytical; macroeconomic. B) Microeconomic; macroeconomic. C) Macroeconomic; microeconomic. D) Microeconomic; analytical. Show Answer Correct Answer: B) Microeconomic; macroeconomic. 23. Goods and services brought in from other countries A) Tariff. B) Imports. C) Exports. D) Supply. Show Answer Correct Answer: B) Imports. 24. Occurs when a nation imports more than it exports A) Floating exchange rate. B) Managed floating exchange rate. C) Unfavorable Balance of Trade. D) Favorable balance of trade. Show Answer Correct Answer: C) Unfavorable Balance of Trade. 25. What are some negatives of globalization? A) Workers are exploited in sweatshops. B) Pollution and deforestation. C) Low wages for factory workers in Asia and Africa. D) All of the answers are correct. Show Answer Correct Answer: D) All of the answers are correct. 26. Consider a tax that imposes a flat rate of 2, 000 dollars annually regardless of income. Who will be affected negatively? A) Upper income. B) Middle income. C) Lower income. D) All will be affected negatively. Show Answer Correct Answer: D) All will be affected negatively. 27. Taxes on imported goods A) Sanction. B) Stoppage. C) Tariff. D) Embargo. Show Answer Correct Answer: C) Tariff. 28. Income tax is the best example of what type of tax? A) Regressive. B) Proportional. C) Progressive. D) Property. Show Answer Correct Answer: C) Progressive. 29. What is a TRUE statement concerning the imposition in the U.S. of a tariff on cheese? A) It lowers the price of cheese domestically. B) It raises the price of cheese internationally. C) It raises revenue for the government. D) It will always result in retaliation from abroad. Show Answer Correct Answer: C) It raises revenue for the government. 30. The Malaysian government buys a new Boeing 787 from the U.S. This transaction is recorded as A) Current account. B) Financial/capital account. C) Official reserves. D) None of above. Show Answer Correct Answer: A) Current account. ← 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