This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 20 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The movement to free international trade is most likely to generate short-term unemployment in which industries: A) Industries in which there are neither imports nor exports. B) Import-competing industries. C) Industries that sell to domestic and foreign buyers. D) Industries that sell to only foreign buyers. Show Answer Correct Answer: B) Import-competing industries. 2. Mill's Theory of reciprocal demand was developed with the illustration of two countries A) England and Germany. B) Germany and U.S.A. C) U.K and U.S.A. D) None of above. Show Answer Correct Answer: A) England and Germany. 3. A government can determined the value of exchange rate in ..... A) Fixed exchange rate system. B) Flexible exchange rate system. Show Answer Correct Answer: A) Fixed exchange rate system. 4. What is an official ban on trade or other commercial activity with a particular country? A) Tariff. B) Product standard. C) Embargo. D) Quota. Show Answer Correct Answer: C) Embargo. 5. What occurs when EXPORTS exceed IMPORTS? A) Trade Equilibrium. B) Trade Deficit. C) Trade Surplus. D) Economic Growth. Show Answer Correct Answer: C) Trade Surplus. 6. What is the ability to produce more of a given product with the same amount of resources known as? A) Trade balance. B) Comparative advantage. C) Absolute advantage. D) Specialization. Show Answer Correct Answer: C) Absolute advantage. 7. Refer to the presence or absence of supplier industries and related industries that are intentionally competitive. A) Demand conditions. B) Relating and supporting industries. C) Firm strategy, structure, and rivalry. D) None of above. Show Answer Correct Answer: B) Relating and supporting industries. 8. A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a (an): A) Domestic subsidy. B) Export subsidy. C) Import quota. D) Export quota. Show Answer Correct Answer: C) Import quota. 9. It suggested that the value of a commodity was determined by and could be measured objectively by the average number of labor hours necessary to produce it. A) Labor theory of value. B) Subjective theory of value. C) Objective theory of value. D) Exchange theory of value. Show Answer Correct Answer: A) Labor theory of value. 10. What is the purpose of the law of comparative advantage? A) Increase the cost of distributing goods or services. B) Increases the opportunity cost of producing goods or services. [. C) Increase profits from international trade. D) Increase the cost of producing goods or services. E) Increases the cost of consuming goods or services. Show Answer Correct Answer: C) Increase profits from international trade. 11. A specific tariff provides home producers more protection when A) The home market buys cheaper products rather than expensive products. B) It is applied to a commodity with many grade variations. C) The home demand for a good is elastic with respect to price changes. D) It is levied on manufactured goods rather than primary products. Show Answer Correct Answer: A) The home market buys cheaper products rather than expensive products. 12. Government payments transferred to exporting companies allowing the companies to compete with other nations A) Tariff. B) Exchange Rates. C) Subsidy. D) Standards. Show Answer Correct Answer: C) Subsidy. 13. Factors of production are perfectly mobile between different countries A) True. B) False. Show Answer Correct Answer: B) False. 14. BMW pays $ 1 million to a U.S. shipper for transporting cars from Germany to the United States. A) Credit. B) Debit. Show Answer Correct Answer: A) Credit. 15. Which is an example of a quota? A) The U.S. stops trade with China. B) The U.S. limits the amount of foreign cars brought into our country. C) The U.S. pays a high tax on BMW cars brought into the country. D) None of above. Show Answer Correct Answer: B) The U.S. limits the amount of foreign cars brought into our country. 16. What are the payments made by the government to provide financial support to certain industries? A) Quota. B) Subsidy. C) Sanction. D) Embargo. Show Answer Correct Answer: B) Subsidy. 17. According to the law of comparative advantage, a country should A) Specialize and export goods with the lowest production cost. B) Specialize and export goods with the lowest opportunity cost. C) Specialize and export goods with the lowest average cost. D) Specialize and export goods with the highest opportunity cost. Show Answer Correct Answer: B) Specialize and export goods with the lowest opportunity cost. 18. The WTO had 77 members countries on it formation on January 1, ..... A) 1998. B) 1994. C) 1995. D) 1996. Show Answer Correct Answer: C) 1995. 19. Two main characteristics of investments are: A) Risk and profitability. B) Resource transfer and balance of payment effects. C) Job creation and technology transfer. D) Higher rate of returns and technology transfer. Show Answer Correct Answer: A) Risk and profitability. 20. An individual, firm, or country has the lowest opportunity cost for producing the good or service. A) Absolute advantage. B) Comparative advantage. C) Opportunity Cost. D) Balance of trade. Show Answer Correct Answer: B) Comparative advantage. 21. International economics is an applied branch of ..... economics A) Macro. B) Behavioural. C) Micro. D) Financial. Show Answer Correct Answer: A) Macro. 22. If a country can produce a certain good at a lower opportunity cost than another country is has the ..... A) Comparative advantage. B) Competition. C) Specialization. D) Absolute advantage. Show Answer Correct Answer: A) Comparative advantage. 23. NAFTA BEST represents the controversy that exists over A) Debt. B) Scarcity. C) Embargoes. D) Trade barriers. Show Answer Correct Answer: D) Trade barriers. 24. Which of the following theory of international trade does not suppose " complete specialisation" ? A) Absolute cost advantage theory. B) Relative cost advantage theory. C) Heckscher Ohlin model of international trade. D) All of these. Show Answer Correct Answer: C) Heckscher Ohlin model of international trade. 25. Foreign trad may not lead to exhaustion of essential materials and minerals. A) False. B) True. Show Answer Correct Answer: A) False. 26. Free trade means A) The countries use the same currency. B) No trade barriers. C) There is a quota on some goods. D) Trade is quick and easy. Show Answer Correct Answer: B) No trade barriers. 27. A closed economy is a closed economy. A) Whose borders are not open to other countries whose borders are not open to other countries. B) Who does not have any financial relationship with any other country Who does not have any financial relationship with any other country. C) One who does minimum international trade is doing minimum international trade. D) None of these None of the given. Show Answer Correct Answer: B) Who does not have any financial relationship with any other country Who does not have any financial relationship with any other country. 28. There is grater amount of risk involved in the internal trade A) False. B) True. Show Answer Correct Answer: A) False. 29. Higher income levels in the US would result in A) Increased exports and appreciation of the US Dollar. B) Increased exports and depreciation of the US dollar. C) Increased imports and appreciation of the US Dollar. D) Increased imports and depreciation of the US Dollar. Show Answer Correct Answer: D) Increased imports and depreciation of the US Dollar. 30. A decrease in value of one currency relative to the other A) Currency Depreciation. B) Currency Appreciation. C) Exchange Rates. D) None of above. Show Answer Correct Answer: A) Currency Depreciation. ← 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