This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 30 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 30 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The components of Balance of payment account are ..... A) Capital account. B) Current account. C) Both a and b. D) None of the above. Show Answer Correct Answer: C) Both a and b. 2. Trade agreement between a group of neighboring countries that promote trade with each other by lowering trade barriers. A) Trading bloc. B) Trade group. C) Trade association. D) Countries of trade. Show Answer Correct Answer: A) Trading bloc. 3. Internal trade have a first hand knowledge of the demand and supply position A) True. B) False. Show Answer Correct Answer: A) True. 4. Which country is not one of Australia's top 5 trading partners for exports? A) UK. B) New Zealand. C) China. D) Japan. Show Answer Correct Answer: B) New Zealand. 5. The current account shows ..... A) International movement of goods and services. B) International movement of capital. C) Foreign exchange market. D) International movement of investments. Show Answer Correct Answer: A) International movement of goods and services. 6. What happens when a nation's currency depreciates? A) Its products become more expensive to other nations. B) Its products become cheaper to other nations and exports may increase. C) Nothing. D) It halts all trade. Show Answer Correct Answer: B) Its products become cheaper to other nations and exports may increase. 7. Trade bloc:Myanmar, Thailand, Cambodia, Singapore, Vietnam, Indonesia A) NAFTA. B) ASEAN. C) European Union. D) None of above. Show Answer Correct Answer: B) ASEAN. 8. Goods or services produced in another country and purchased by the home country. A) Outgoers. B) Imports. C) Transports. D) Exports. Show Answer Correct Answer: B) Imports. 9. Taxes on imported goods, to protect domestic goods. A) Quota. B) Dumping. C) Protective Tariff. D) Import. Show Answer Correct Answer: C) Protective Tariff. 10. International trade theory refers to: A) The microeconomic aspects of international trade. B) The macroeconomic aspects of international trade. C) Open economy macroeconomics of international finance. D) All of above. Show Answer Correct Answer: A) The microeconomic aspects of international trade. 11. All of these restrict international trade EXCEPT A) Trade deficits. B) Embargoes. C) Subsidies. D) Quotas. Show Answer Correct Answer: A) Trade deficits. 12. According to the ..... argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers. A) Scientific tariff argument. B) Foreign dumping argument. C) Infant industry argument. D) Beggar they neighbor argument. Show Answer Correct Answer: C) Infant industry argument. 13. An agreement that will eliminate all tariffs and other trade barriers is an example of a A) Customs union. B) Monetary union. C) Common market. D) Free Trade area. Show Answer Correct Answer: D) Free Trade area. 14. Refers to when one individual, firm, or country has the lowest opportunity cost for producing the good or service. A) Trade off. B) Comparative Advantage. C) Absolute Advantage. D) Balance of trade. Show Answer Correct Answer: B) Comparative Advantage. 15. The ..... is involved in the economy because it makes laws to protect businesses. A) Government. B) Business. C) Global economy. D) Foreign trade. Show Answer Correct Answer: A) Government. 16. Pounds = 1 US Dollar, if you exchange 1, 000 for Pound you would get ..... A) 153 Pounds. B) 530 Pounds. C) 1530 Pounds. D) 15.3 Pounds. Show Answer Correct Answer: C) 1530 Pounds. 17. Explain that most trade takes place because of ..... advantage in the production of a good or service. A) Comparative. B) Absolute. Show Answer Correct Answer: A) Comparative. 18. If a small country imposes a tariff on an imported good, its terms of trade will A) Improve. B) Worsen. C) Not change. D) Any of the above. Show Answer Correct Answer: C) Not change. 19. A tariff can ..... raise a country's welfare A) Never. B) Sometimes. C) Always. D) None of above. Show Answer Correct Answer: B) Sometimes. 20. An increase in the value of currency is called A) Depreciation. B) Appreciation. C) Exchange rate. D) Trade surplus. Show Answer Correct Answer: B) Appreciation. 21. What is the formula for calculating comparative advantage? A) Cost/Output. B) Output/Cost. Show Answer Correct Answer: A) Cost/Output. 22. Exchange rate is the ..... A) Makes travel more expensive for Americans. B) Makes travel cheaper for Americans. C) Will increase imports to Americans. D) Value of a country's currency compared to another country's. Show Answer Correct Answer: D) Value of a country's currency compared to another country's. 23. A person or organization that uses a product or service is a(n): A) Debtor. B) Economist. C) Consumer. D) Loan shark. Show Answer Correct Answer: C) Consumer. 24. Which of the following is NOT an argument in favor of protectionism? A) Protectionism shields infant industries from competition. B) Protectionism promotes industries that are essential to national security. C) Protectionism makes domestic firms more competitive in the long run. D) Protectionism safeguards workers' jobs. Show Answer Correct Answer: C) Protectionism makes domestic firms more competitive in the long run. 25. The U.S. can produce 50 cars and 25 tools. Peru can produce 20 cars and 15 tools. Who has the absolute advantage in tools? A) Not enough info. B) U.S. C) Neither. D) Peru. Show Answer Correct Answer: B) U.S. 26. If you are going to visit America and have $ 2999 to spend, how much currency could you obtain? (1AUD = 0.68USD) A) = 2999 x 0.68. B) = 2999 / 0.68. C) = 1x 0.68. D) = 1 / 0.68. Show Answer Correct Answer: A) = 2999 x 0.68. 27. Under a flexible exchange rate system, the indian rupee will appreciate against the Japanese yen when A) India has a trade deficit with japan. B) Japan's economy enters a recession, but India's does not. C) Japan's money supply decreases while India's money supply increases. D) India's inflation rate exceeds japan's. E) Real interest rates in India increase relative to those in Japan. Show Answer Correct Answer: E) Real interest rates in India increase relative to those in Japan. 28. The statement: "Absolute advantage requires one country to be better at production of one product and another country to be better at production of another good for specialization and trade to be mutually advantageous." A) Is not true at all. B) Poorly explains all trade flows in the modern global economy. C) Perfectly explains all trade flows in the modern global economy. D) Was fundamental for mercantilists. Show Answer Correct Answer: B) Poorly explains all trade flows in the modern global economy. 29. A factor of production that can be used in any sector of an economy is a(an) A) Specific factor. B) Import-competing factor. C) Mobile factor. D) Export-competing factor. Show Answer Correct Answer: C) Mobile factor. 30. A tax imposed by one country on the goods of another. A) Sales tax. B) Tariffs. C) Excise tax. D) Real estate tax. Show Answer Correct Answer: B) Tariffs. ← 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