This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 28 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An economy without international trade is known as closed economy. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 2. Which trade agreement are the countries on the map part of? A) MDH. B) NAFTA. C) ASEAN. D) European Union. Show Answer Correct Answer: D) European Union. 3. A person who favors a free-trade policy would most likely ..... A) Support lower tariffs on imports. B) More strict embargoes. C) Support higher tariffs on imports. D) Higher quotas on imports. Show Answer Correct Answer: A) Support lower tariffs on imports. 4. These are the goals of Horizontal FDI, except ..... A) To avoid tariff barriers. B) To reduce production costs. C) To gain market shares and prolong product life cycle. D) To specialize production on an international scale. Show Answer Correct Answer: D) To specialize production on an international scale. 5. Which of the following is not an argument against protective tariffs? A) Restricting international trade robs us of part of its benefits. B) Free admission of imports is one of the most effective ways of expanding the foreign markets of home industries. C) When one country institutes tariffs, it is likely that other countries will follow. D) A tariff that keeps out foreign goods increases the market for U.S. goods. Show Answer Correct Answer: D) A tariff that keeps out foreign goods increases the market for U.S. goods. 6. When a country both exports and imports a type of commodity, the country is engaged in ..... A) An attempt to monopolize the relevant industry. B) Increasing returns to scale. C) Inter-industry trade. D) Intra-industry trade. Show Answer Correct Answer: D) Intra-industry trade. 7. What is a potential benefit of free trade? A) Specialization in commodity production. B) Less unemployment in sunset industries. C) Access to goods that are not produced in the domestic market. D) More employment in sunrise industries. Show Answer Correct Answer: C) Access to goods that are not produced in the domestic market. 8. The Government of India and RBI have an important role in NPCI growth as well as nurturing leading banks in India especially in the first years. A) False. B) True. Show Answer Correct Answer: B) True. 9. Which of the following are protectionism policies purposes?I. infant industry argumentII. transportation cost argumentIII. national security argumentIV. domestic employment argument A) I, II III and IV. B) I, II and III. C) I, III and IV. D) I and IV. Show Answer Correct Answer: C) I, III and IV. 10. When Mataeo buys Euros through ....., he will use his U.S. dollars to pay for them. A) The foreign exchange market. B) A floating exchange market. C) The currency exchange market. D) Foreign currency market. Show Answer Correct Answer: A) The foreign exchange market. 11. Throughout the post-WWII, the importance of tariffs as a trade barrier has A) Fluctuated wildly. B) Remained the same. C) Increased. D) Decreased. Show Answer Correct Answer: D) Decreased. 12. Which team has won 11 games in a row in the last 13? A) America MG. B) Flamengo. C) River Plate. D) Palm trees. Show Answer Correct Answer: A) America MG. 13. The ability to produce more goods than another country using the same amount of resources is known as ..... A) Absolute Advantage. B) Comparative Advantage. Show Answer Correct Answer: A) Absolute Advantage. 14. What does factor intensity reversal mean? A) A good is having high capital labour ratio in two different countries. B) A good is capital intensive in one country and labour intensive in other country. C) Price of capital in one country is high and price of labour in other country is higher. D) None of these. Show Answer Correct Answer: B) A good is capital intensive in one country and labour intensive in other country. 15. The Concept of reciprocal demand was introduced by Ricardo A) False. B) True. Show Answer Correct Answer: A) False. 16. Exports minus imports or how many goods a county exports versus imports A) Exports. B) Subsidy. C) Quotas. D) Balance of Trade. Show Answer Correct Answer: D) Balance of Trade. 17. Each country has new infant industry to promote. The reason for the infant industry argument is to ..... A) Control money supply in the economy. B) Protect new industries from the establishment of foreign competitors. C) Reduce the inflation problem. D) Avoid structural unemployment. Show Answer Correct Answer: B) Protect new industries from the establishment of foreign competitors. 18. Which of the following is NOT a beneficial effect of direct investment on the Home country? A) Higher profits. B) Avoids the possible loss of export markets. C) Risk diversification. D) Transfer of technology. Show Answer Correct Answer: D) Transfer of technology. 19. A tax on an imported good is called a? A) Quota. B) Barrier. C) Tariff. D) Standard. Show Answer Correct Answer: C) Tariff. 20. In trade, dumping can be defined as: A) The selling of a good in another country at a price below its unit cost of production. B) Artificially keeping a country's currency below market value. C) The use of protectionist measures to protect domestic employment. D) The use of administrative barriers to limit imports. Show Answer Correct Answer: A) The selling of a good in another country at a price below its unit cost of production. 21. Ecotourism is-responsible travel natural areas that conserve the environment and improves the well being of the locals. A) False. B) True. Show Answer Correct Answer: B) True. 22. One potential advantage for a country of encouraging a multinational business to set up is that it will: A) Always create more jobs than might be lost. B) Keep all of the profits made within the country. C) Not compete with the existing national businesses. D) Pay taxes to the government. Show Answer Correct Answer: D) Pay taxes to the government. 23. Interest income remains..... A) Capital Account-Borrowing Side The borrowing side of the capital account. B) Current Account-Credit Side On the credit side of the current account. C) Capital Account-Credit Side On the credit side of the capital account. D) Current Account-Credit Side On the debit side of the current account. Show Answer Correct Answer: B) Current Account-Credit Side On the credit side of the current account. 24. The measure of how much one currency is worth in relation to another. A) Exchange rate. B) Change rate. Show Answer Correct Answer: A) Exchange rate. 25. International trade concerns: A) Trade in goods and services. B) Migrations. C) Foreign direct investments. D) All above. Show Answer Correct Answer: A) Trade in goods and services. 26. ..... is a decrease in the value of a currency as measured by the amount of foreign currency it can buy. A) Subsidy. B) Depreciation. C) Appreciation. D) Exchange rates. Show Answer Correct Answer: B) Depreciation. 27. What is another term for trade between nations? A) Free trade. B) Voluntary trade. C) Trade barrier. D) International trade. Show Answer Correct Answer: D) International trade. 28. Name one important component of international economics. A) International balance of trade. B) Export-import ratio. C) Exchange rate. D) International cash balance. Show Answer Correct Answer: A) International balance of trade. 29. Given the same amount of resources, if a country can produce more of particular commodities compared to another country, that country is said to have ..... A) Productive advantage. B) An absolute advantage. C) A comparative advantage. D) Ratio of export price index to import price index. Show Answer Correct Answer: B) An absolute advantage. 30. An increase in the exchange value of one nation's currency in terms of currency of another nation's is called ..... A) Depreciation of currency. B) Appreciation of currency. Show Answer Correct Answer: B) Appreciation of currency. ← 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