This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 27 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 27 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A depreciation of a country's currency means for this country's residents that imported goods are A) Cheaper. B) More expensive. Show Answer Correct Answer: B) More expensive. 2. Nations that are the target of embargoes are forced to deal with which of the following? A) Falling prices. B) Lower tariffs. C) Increased scarcity. D) More foreign competition. Show Answer Correct Answer: C) Increased scarcity. 3. What is meant by opportunity cost in the law of comparative advantage? A) Costs incurred to produce certain goods or services. B) Costs incurred to produce any type of good or service. C) Costs that must be borne when not producing certain goods or services. D) Costs that must be borne when not producing all types of goods or services. E) Costs that must be borne when producing certain goods or services. Show Answer Correct Answer: C) Costs that must be borne when not producing certain goods or services. 4. Embargoes, tariffs, and quotas are examples of A) Exchange rates. B) Trade barriers. C) Trading blocs. D) Free trade. Show Answer Correct Answer: B) Trade barriers. 5. The study for how people's needs and wants are provided is ..... A) Mixed. B) Economics. C) Enterprise. D) Scarcity. Show Answer Correct Answer: B) Economics. 6. Adam Smith describes trade taking place as a result of countries having ..... in production of particular goods, relative to each other. A) Absolute advantage. B) Comparative advantage. C) Both absolute and comparative advantage. D) Neither absolute nor comparative advantage. Show Answer Correct Answer: A) Absolute advantage. 7. Placing taxes on imported shoes from Vietnam is an example of a A) Absolute advantage. B) Trade surplus. C) Trade barrier. D) Exchange rates. Show Answer Correct Answer: C) Trade barrier. 8. When the government spends more money than it is taking in as revenue, this is known as ..... A) Surplus Spending. B) Deficit Spending. C) Transition. D) Equilibrium. Show Answer Correct Answer: B) Deficit Spending. 9. A payment from the government to businesses. They redistribute income from the general taxpaying public to non-competitive firms, thereby helping the firms to compete with wealthier foreign producers. A) European Union or EU. B) Floating exchange rate. C) Market advantages. D) Subsidies. Show Answer Correct Answer: D) Subsidies. 10. Which nation is not a part of the EU? A) Taiwan. B) Germany. C) France. D) Spain. Show Answer Correct Answer: A) Taiwan. 11. If 1 Dollar = RM 4.10 become 1 Dollar = RM 4.20, it shows that the RM experience ..... of value. A) Falling. B) Rising. Show Answer Correct Answer: A) Falling. 12. When imports, income flows and transfers out of the UK exceed exports, income flows and transfers into the UK A) There is a current account deficit. B) There is a current account surplus. C) The current account is balanced. D) None of above. Show Answer Correct Answer: A) There is a current account deficit. 13. Similar to import tariffs, import quotas tend to result in A) Higher prices and reduced imports. B) Increased government revenue. C) Increased consumer surplus. D) Decreased producer surplus. Show Answer Correct Answer: A) Higher prices and reduced imports. 14. The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources A) Comparative Advantage. B) Absolute Advantage. C) Governmental Advantage. D) Monopoly. Show Answer Correct Answer: B) Absolute Advantage. 15. The figure illustrates the international movement of capital. When there is international movement of capital in both Nations, the amount of capital movement is ..... A) AB. B) O2A. C) O2B. D) O1B. Show Answer Correct Answer: A) AB. 16. The value of all monetary transactions between a country's economy and the rest of the world. A) Balance of Payments. B) Balance of Trade. C) Trade Deficit. D) Trade Surplus. Show Answer Correct Answer: A) Balance of Payments. 17. An argument that supports the use of trade barriers when a new industry is in the early stages of development. A) Infant Industries. B) Balance of Trade. C) Free Trade. D) National Security. Show Answer Correct Answer: A) Infant Industries. 18. Coming into effect in 1994, NAFTA encouraged free trade between the United States and which two other countries? A) Canda and cuba. B) Japan and china. C) Canada and mexico. D) Panama and brazil. Show Answer Correct Answer: C) Canada and mexico. 19. The purpose of a tariff, when used for protectionism, is to A) Limit the number of foreign goods imported into the country. B) Make an imported good more expensive than its domestically produced counterpart. C) Raise revenues to pay subsidies to domestic producers. D) Stall importation while perishable items rot. Show Answer Correct Answer: B) Make an imported good more expensive than its domestically produced counterpart. 20. Which of the following is NOT a major themes of International Economics? A) Gains from Trade. B) Pattern of Trade. C) Exchange Rate Determination. D) Public Finance. Show Answer Correct Answer: D) Public Finance. 21. An import quota is a A) Tax on import quantities above the legal limit. B) Way to increase tariff revenues for the exporting country. C) Legal limit on the amount of a good that can be imported into a country. D) Legal incentive for members of WTO to increase their exports of a good or service. Show Answer Correct Answer: C) Legal limit on the amount of a good that can be imported into a country. 22. Plaza was establish by many people? A) 4. B) 3. C) 1. D) None of above. Show Answer Correct Answer: B) 3. 23. U.S. goods become more expensive A) When the dollar depreciates. B) When the dollar appreciates. Show Answer Correct Answer: B) When the dollar appreciates. 24. The production possibilities curve is an illustration of what? A) Opportunity costs and trade-offs. B) Only opportunity costs. C) Only trade-offs. D) None of the above. Show Answer Correct Answer: A) Opportunity costs and trade-offs. 25. What is an advantage of a floating exchange rate? A) There is no advantadge. B) Interest rates are free to be employed to domestic goals. C) Reduced speculation from foreign investors. D) High consumer and business confidence. Show Answer Correct Answer: B) Interest rates are free to be employed to domestic goals. 26. Should Canada impose a tariff on imports, one would expect Canada's: A) Terms of trade to improve and volume of trade to decrease. B) Terms of trade to worsen and volume of trade to decrease. C) Terms of trade to improve and volume of trade to increase. D) Terms of trade to worsen and volume of trade to increase. Show Answer Correct Answer: A) Terms of trade to improve and volume of trade to decrease. 27. A foreign trade zone is A) A regional area within which trade with foreign nations is allowed. B) A free trade agreement among several nations. C) Designed to limit export of manufactured goods by placing export taxes on goods made within the zone. D) Designed to promote exports by deferring import duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically. Show Answer Correct Answer: D) Designed to promote exports by deferring import duties on intermediate inputs and waving such duties if the final product is re-exported rather than sold domestically. 28. How should developing countries protect their new industries from competition? A) Income tax. B) Import duties. C) Export duties. D) Indirect taxes. Show Answer Correct Answer: B) Import duties. 29. What is true about comparative advantage? A) It was first thought out by the mathematician David Rimaro. B) A country can produce at a lower opportunity cost than another country. C) A country can produce at a higher opportunity cost than another country. D) Comparative advantage assumes that costs change and there is not a constant return to scale. Show Answer Correct Answer: B) A country can produce at a lower opportunity cost than another country. 30. According to comparative advantage theory, nations can still gain from trade even without an absolute advantage. A) True. B) False. Show Answer Correct Answer: A) True. ← 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