This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Specifications that products may have to meet for various purposes such as health, safety or compatibility are called? A) Embargo. B) Tariff. C) Standards. D) Quota. Show Answer Correct Answer: C) Standards. 2. Internal trade is also called as A) Home trade. B) Domestic trade. C) Inter-regional trade. D) All the above. Show Answer Correct Answer: D) All the above. 3. ..... terms of trade promote rapid economic development of an underdeveloped country. A) Favorable. B) Unfavorable. Show Answer Correct Answer: A) Favorable. 4. If the international value of the United States dollar depreciates in comparison with the Japanese yen, which of the following is most likely to occur? A) United States exports to Japan will increase. B) The United States government will increase the tariff on Japanese imports. C) The United States balance-of-trade deficit with Japan will become even larger. D) United States tourists can be expected to visit Japan in greater numbers. E) Trade between the United States and Japan will not be affected. Show Answer Correct Answer: A) United States exports to Japan will increase. 5. Trading blocs, such as NAFTA and the EU, increase trade between their member countries by ..... trade barriers. A) Decreasing. B) Increasing. Show Answer Correct Answer: A) Decreasing. 6. External economies of scale arise when the cost per unit ..... A) Rises as the industry grows larger and falls as the average firm grows larger. B) Falls as the industry grows larger and rises as the average firm grows larger. C) Falls as the industry and the average firm grows larger. D) Remains constant over a broad range of output. E) Rises as the industry and the average firm grows larger. Show Answer Correct Answer: B) Falls as the industry grows larger and rises as the average firm grows larger. 7. If the United States has a balance of trade deficit with China, it means that A) The U.S. imports more products from China than it exports to China. B) U.S. dollars are more valuable in China than the Chinese currency is in the U.S. C) The U.S. exports more products to China than it imports from China. D) American companies are investing more in their operations in China than China is investing in the United States. Show Answer Correct Answer: A) The U.S. imports more products from China than it exports to China. 8. If the tariff on computers is not changed, but the government then adds hitherto nonexistent tariffs on imported semi-conductor components, then the effective rate of protection in the computer industry will A) Remain the same. B) Decrease. C) No longer apply. D) Increase. Show Answer Correct Answer: B) Decrease. 9. Suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. Which of the following is true? A) Sam has a comparative advantage in making blankets. B) Sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets. C) Sam has an absolute advantage in making blankets. D) Sam has a comparative advantage in knitting sweaters. Show Answer Correct Answer: A) Sam has a comparative advantage in making blankets. 10. The price of one country's currency express in terms of another country's currency A) Currency. B) Exchange rate. C) Capstone. D) None of above. Show Answer Correct Answer: B) Exchange rate. 11. What is an embargo? A) A government order to stop trade. B) A limit placed on imports. C) A tax placed on imports. D) None of above. Show Answer Correct Answer: A) A government order to stop trade. 12. Current International Economic Problemsand Challenges does not include: A) Slow Growth and High Unemployment in Advanced Economies after "the Great Recession". B) Trade Protectionism in Advanced Countries. C) Structural Imbalances in Advanced Economies. D) Narrowing down Poverty in Many Developing Countries. Show Answer Correct Answer: D) Narrowing down Poverty in Many Developing Countries. 13. Total value of goods and services in a country for a specific time period. A) Gross National Happiness. B) Gross National Income (GNI). C) Per capita income. D) Gross Domestic Product. Show Answer Correct Answer: D) Gross Domestic Product. 14. An export can be defined as any product that is: A) Made in another country. B) Sold to another country. C) Made from goods bought from another country. D) Bought from another country. Show Answer Correct Answer: B) Sold to another country. 15. Which group benefits when the US dollar depreciates against other currencies? A) Foreign citizens vacationing in the U.S. B) U.S. citizens buying foreign goods and services. C) U.S. citizens traveling in foreign countries. D) Foreign governments with U.S. treasury bonds. Show Answer Correct Answer: C) U.S. citizens traveling in foreign countries. 16. Special taxes place on products imported from another country. A) Subsidies. B) Tariffs. C) Quotas. D) Sanctions. Show Answer Correct Answer: B) Tariffs. 17. Currency depreciation could be caused by A) Supply Increase or Demand Increase. B) Supply Increase or Demand Decrease. C) Supply Decrease or Demand Decrease. D) Supply Decrease or Demand Increase. Show Answer Correct Answer: B) Supply Increase or Demand Decrease. 18. Any commercial transaction that crosses the borders of two or more nations is known as A) Global manufacturing. B) International business. C) Domestic marketing. D) Market segmentation. Show Answer Correct Answer: B) International business. 19. When a country wants to cut some or all trade off with another country as a punishment, they will place what on the other country? A) Embargo. B) Tariff. C) Quota. D) Subsidies. Show Answer Correct Answer: A) Embargo. 20. The trade model of the Swedish economists Heckscher and Ohlin maintains that A) A country exports goods for which its resource endowments are most suited. B) Absolute advantage determines the distribution of the gains from trade. C) The division of labor is limited by the size of the world market. D) Comparative advantage determines the distribution of the gains from trade. Show Answer Correct Answer: A) A country exports goods for which its resource endowments are most suited. 21. When the US$ exchange rate falls it will usually A) Help to reduce a US trade deficit. B) Reduce US inflation. C) Increase the foreign price of US exports. D) Reduce the price of US imports. Show Answer Correct Answer: A) Help to reduce a US trade deficit. 22. 1) Trade between two countries can benefit both countries if A) Each country produces a wide range of goods for export. B) Each country has a more elastic supply for the exported goods. C) Each country exports that good in which it has a comparative advantage. D) Each country enjoys superior terms of trade. Show Answer Correct Answer: C) Each country exports that good in which it has a comparative advantage. 23. What is MOST LIKELY to happen to U.S. imports and exports if the US dollar becomes stronger relative to other currencies? A) Imports will decrease, exports will increase. B) Both imports and exports will increase. C) Imports will increase, exports will decrease. D) Both imports and exports will decrease. Show Answer Correct Answer: C) Imports will increase, exports will decrease. 24. Country's wealth was determined by the amount of its gold and silver holdings. A) Competitive advantage. B) Mercantilism. C) Absolute advantage. D) Trade surplus. Show Answer Correct Answer: B) Mercantilism. 25. Which of the following is not a non-tariff barrier? A) A quota on apparel. B) A tax equal to 12% of value on imported oil. C) A regulation requiring government agencies to favor domestically producers. D) A voluntary export restraint on cars. Show Answer Correct Answer: B) A tax equal to 12% of value on imported oil. 26. ..... established by the interacion of the market forces of demand for and supply of the currency A) Fixed Exchange Rate. B) Flexible Exchange Rate. C) Floating exchange rate. D) None of above. Show Answer Correct Answer: B) Flexible Exchange Rate. 27. Which of the following us not a characteristic of international trade? A) Tariff and quota. B) Foreign exchange market. C) Common currency. D) Higher national standard of living. Show Answer Correct Answer: C) Common currency. 28. Top 5 two-way trading partners in 2018 A) United States, China, India, Japan, Republic of Korea. B) China, United States, Japan, Republic of Korea, India. C) China, Japan, United States, Republic of Korea, India. D) United States, China, Japan, Republic of Korea, India. Show Answer Correct Answer: C) China, Japan, United States, Republic of Korea, India. 29. This details a person's borrowing and repayment history for the last seven years reported to the company's by a person's previous and current lenders. A) Payment history. B) Credit Report. C) IRA. D) Insurance. Show Answer Correct Answer: B) Credit Report. 30. What is a disadvantage of Free Trade Agreements A) Better materials. B) Outsourcing of jobs. C) Bad labels. D) None of above. Show Answer Correct Answer: B) Outsourcing of jobs. ← PreviousNext →Related QuizzesEconomics QuizzesFinance QuizzesInternational Economics Quiz 1International Economics Quiz 2International Economics Quiz 4International Economics Quiz 5International Economics Quiz 6International Economics Quiz 7International Economics Quiz 8International Economics Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books