This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 25 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Depending on the method of determining the duty, it is divided into what duties. A) Special, ad valorem, mixed. B) Seasonal, anti-dumping, compensatory. C) Nominal, effective. D) Import, export, transit. Show Answer Correct Answer: A) Special, ad valorem, mixed. 2. Floating exchange rates A) Are set daily by the Fed. B) Are an established by an agreement of two nations. C) Values are determined by supply and demand. D) Are a result of bilateral agreements. Show Answer Correct Answer: C) Values are determined by supply and demand. 3. An example of a Monetary Union A) ASEAN. B) NAFTA. C) EU. D) CARICOM. Show Answer Correct Answer: C) EU. 4. The fact that the U.S. tends to import goods from Guatemala that it could produce more abundantly itself tends to suggest that A) Guatemala has a comparative advantage in producing these goods. B) Guatemala has an absolute advantage in producing these goods. C) Guatemala has more net exports than the U.S. D) Guatemala enjoys a trade deficit over the U.S. Show Answer Correct Answer: A) Guatemala has a comparative advantage in producing these goods. 5. If the US dollar increases in value compared with the Mexican peso, what has the dollar done? A) Depreciate. B) Contractionary policy. C) Appreciate. D) Flexible exchange rate. Show Answer Correct Answer: C) Appreciate. 6. Homogenization is the name given to the process whereby globalization causes one culture to consume another. It would tend to highlight the rise of world beat, world cuisines, world tourism, uniform consumption patterns and cosmopolitanism A) False. B) True. Show Answer Correct Answer: B) True. 7. The opening or expansion of international trade usually affects all members of society: A) Most negatively but some positively. B) Negatively. C) Positively. D) Most positively but some negatively. Show Answer Correct Answer: D) Most positively but some negatively. 8. Which of the following is an effect of a tariff? A) Higher prices for consumers. B) It helps foreign producers. C) Consumers can't get product once quota is met. D) Lower prices for consumers. Show Answer Correct Answer: A) Higher prices for consumers. 9. Internal trade concerned with two monetary policy A) False. B) True. Show Answer Correct Answer: A) False. 10. Free traders point out that: A) There is usually an efficiency gain from having tariffs. B) There is usually an efficiency loss from having tariffs. C) Producers lose from tariffs at the expense of consumers. D) Producers lose from tariffs at the expense of the government. Show Answer Correct Answer: B) There is usually an efficiency loss from having tariffs. 11. In the short-run, tariffs and quotas help protect A) Consumer choice. B) Foreign employment. C) Domestic jobs. D) Price wars. Show Answer Correct Answer: C) Domestic jobs. 12. There is an absolute advantage when one country is more efficient than any other country in producing a particular product. A) True. B) False. Show Answer Correct Answer: A) True. 13. This law states that in a production process, adding more workers might initially increase output and eventually creates the optimal output per worker. A) Diminishing marginal benefit. B) Negative marginal returns. C) Diminishing marginal utility. D) Diminishing marginal returns. Show Answer Correct Answer: D) Diminishing marginal returns. 14. An increase in domestic inflation rates, relative to the world, leads to which of the following: A) An increase in demand for the domestic currency. B) A decrease in demand for the domestic currency. Show Answer Correct Answer: B) A decrease in demand for the domestic currency. 15. In a fixed exchange rate system, a government must intervene to stop the value of its currency from falling by: A) Buying its currency. B) Selling its currency. Show Answer Correct Answer: A) Buying its currency. 16. The aim of internal and external trade is to stabilize the prize level A) True. B) False. Show Answer Correct Answer: A) True. 17. Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S should specialize in ..... A) Automobiles. B) Airplanes. C) Both goods. D) Neither of the goods. Show Answer Correct Answer: B) Airplanes. 18. How will Japan's short-term investment in India come into India's balance of payments? Short-term investment by Japan in India will be on which side of India's balance of payments? A) Current Account-Credit Side On the debit side of the current account. B) Capital Account-Credit Side On the credit side of the capital account. C) Capital Account-Borrowing Side The borrowing side of the capital account. D) Current Account-Credit Side On the credit side of the current account. Show Answer Correct Answer: B) Capital Account-Credit Side On the credit side of the capital account. 19. First Economist who introduced basic idea of International Economics A) J M Keynes. B) Hume. C) David Ricardo. D) Adam Smith. Show Answer Correct Answer: B) Hume. 20. The formula for finding the export quota is: A) Que = YaSMIN / Expert 1/2. B) K = Export / Yam 100%. C) K = Yam / Export 100%. D) None of above. Show Answer Correct Answer: B) K = Export / Yam 100%. 21. This is the advantage companies get when production of either goods or services becomes more efficient. A) Economies of scale. B) Economies of scope. C) Command economy. D) Market economy. Show Answer Correct Answer: A) Economies of scale. 22. What is the basis for calculating comparative advantage in international trade? A) Cost of producing goods or services. B) Opportunity cost of producing goods or services. C) Relative prices of commodities. D) Profits from international trade. E) All true. Show Answer Correct Answer: B) Opportunity cost of producing goods or services. 23. Which is NOT a benefit of Trade Barriers A) Make imports more expensive to buy. B) Causes higher demand for domestic goods. C) Protects domestic jobs. D) Lowers demand for domestic goods. Show Answer Correct Answer: D) Lowers demand for domestic goods. 24. Which of the following is not a benefit of international trade? A) Lower domestic prices. B) A greater range of consumption choices. C) High wage levels for all domestic workers. D) Development of more efficient methods and new products. Show Answer Correct Answer: C) High wage levels for all domestic workers. 25. Ad valorem tariffs are collected as A) Fixed amounts of money per unit traded. B) A percentage of the price of the product. C) A percentage of the quantity of imports. D) All of the above. Show Answer Correct Answer: B) A percentage of the price of the product. 26. When the dollar "rises" compared to other currencies (it appreciates), which group benefits the MOST? A) Those who import products. B) Those who export products. Show Answer Correct Answer: A) Those who import products. 27. Which of the following is most likely to reduce Australia's import volumes? A) A recession in Australia and an appreciation of the Australian dollar. B) An economic expansion in Australia and a depreciation of the Australian dollar. C) An economic expansion in Australia and an appreciation of the Australian dollar. D) A recession in Australia and a depreciation of the Australian dollar. Show Answer Correct Answer: D) A recession in Australia and a depreciation of the Australian dollar. 28. If the value of a country's imports exceeds the value of its exports. A) Trade barriers. B) Balance of trade. C) Trade deficit. D) Trade Surplus. Show Answer Correct Answer: C) Trade deficit. 29. Financial Account transactions include items such as A) Imports. B) Exports. C) Transfers & Remittances. D) Purchase and sale of stocks and bonds. Show Answer Correct Answer: D) Purchase and sale of stocks and bonds. 30. If the Mexican peso depreciates compared to the Canadian dollar, exports from Canada to Mexico ..... A) Would likely decrease. B) Would likely increase. C) Wouldn't change at all. D) Would have to stop all together. Show Answer Correct Answer: A) Would likely decrease. ← 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