This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 33 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 33 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Why do people trade? A) They want to find out how much their currency is worth compared to another country's currency. B) They expect to be better off as a result of trade. C) They trade to increase scarcity. D) They trade so they don't have to barter. Show Answer Correct Answer: B) They expect to be better off as a result of trade. 2. The figure illustrates the international movement of capital. When there is no international movement of capital, Nation 1 and Nation 2 invest their entire capital stock domestically, which area belongs to Nation 2's capital owners? A) O2HMA. B) O1FGA. C) O1JMA. D) O1CGA. Show Answer Correct Answer: A) O2HMA. 3. Country "G" can produce 20 hamburgers or 80 hot dogs. Country "H" can produce 14 hamburgers or 28 hot dogs. What is the opportunity cost for Country "H" to produce 1 hamburger? A) 1/2 hot dogs. B) 15 hot dogs. C) 2 hot dogs. D) 1.5 hot dogs. Show Answer Correct Answer: C) 2 hot dogs. 4. One of Australia's top five imports is: A) Passenger Motor Vehicles. B) Coal. C) Iron Ore. D) Natural Gas. Show Answer Correct Answer: A) Passenger Motor Vehicles. 5. ..... is the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group. A) Absolute advantage. B) Comparative advantage. C) Depreciation. D) Appreciation. Show Answer Correct Answer: A) Absolute advantage. 6. The real income of domestic producers and consumers can be increased by A) Technological progress but not international trade. B) International trade but not technological progress. C) Technological progress and international trade. D) Neither technological progress nor international trade. Show Answer Correct Answer: C) Technological progress and international trade. 7. How is an exchange rate determined in the money market? A) The forces of supply and demand. B) Government/the Federal Reserve Bank. C) Whatever sellers of goods are willing to take. D) Investors decide the value of the currency they wish to invest. Show Answer Correct Answer: A) The forces of supply and demand. 8. Each country has a new infant industry to promote. Countries use the infant industry argument to ..... A) Avoid structural unemployment. B) Protect new industries from the establishment of foreign competitors. C) Control money supply in the economy. D) Reduce inflation problems. Show Answer Correct Answer: B) Protect new industries from the establishment of foreign competitors. 9. Which of the following is international trade? A) Trade between provinces. B) Trade between regions. C) Trade between countries. D) None. Show Answer Correct Answer: C) Trade between countries. 10. Goods and services produced in one country and purchased by another A) Absolute Advantages. B) Imports. C) Economic Advantages. D) Exports. Show Answer Correct Answer: D) Exports. 11. If two countries begin to trade and both produce a product subject to internal economies of scale, then the country with the ..... rate of production will ..... production until it controls ..... of the market. A) Higher; increase; 100%. B) Lower; increase; 50%. C) Lower; increase; 100%. D) Higher; increase; 50%. Show Answer Correct Answer: A) Higher; increase; 100%. 12. Economist believe which of the following are benefits of international trade: A) There can be increased consumption for all. B) Global production will be increased. C) World resources will be used more efficiently. D) All of these are true. Show Answer Correct Answer: D) All of these are true. 13. Terms of Trade may be flavorable or unfavourable A) False. B) True. Show Answer Correct Answer: B) True. 14. The value of all money coming into a country thanks to exports, minus all the money going out of the country as it pays for imports A) Absolute advantage. B) Balance of payments. C) Comparative advantage. D) Unfavorable Balance of Trade. Show Answer Correct Answer: B) Balance of payments. 15. What trade agreement reduces trade barriers between the US, Canada, & Mexico? A) United Nations. B) European Union. C) Association of Southeast Asian Nations. D) North American Free Trade Agreement. Show Answer Correct Answer: D) North American Free Trade Agreement. 16. A strong dollar leads to A) Cheaper imports. B) Cheaper exports. C) No change in international prices. D) More expensive imports. Show Answer Correct Answer: A) Cheaper imports. 17. The figure illustrates the international movement of capital. When there is international movement of capital in both Nations, how does the yield for Nation 2's owners of capital change? A) Lose THME. B) Lose THMR. C) Gain THMR. D) Gain THME. Show Answer Correct Answer: B) Lose THMR. 18. Goods or services that a country sells to other nations A) Duty. B) Import. C) Tariff. D) Export. Show Answer Correct Answer: D) Export. 19. Which of the following is true in the short run if consumers buy more imported goods and fewer domestic goods? A) The trade balance moves toward deficit, and equilibrium income decreases. B) The trade balance moves toward deficit, and equilibrium income increases. C) The trade balance moves toward surplus, and equilibrium income is unaffected. D) The trade balance moves toward surplus, and equilibrium income decreases. E) The trade balance is unaffected, and equilibrium income decreases. Show Answer Correct Answer: A) The trade balance moves toward deficit, and equilibrium income decreases. 20. What is the impact of an increase of tariffs on imported goods for domestic producers A) Government revenues will increase. B) Prices will decrease. C) Imports will fall. D) Domestic firms will produce more. Show Answer Correct Answer: D) Domestic firms will produce more. 21. If the value of a country's exports fall short of the value of its imports A) Trade deficit. B) Trade surplus. C) Balance of trade. D) None of above. Show Answer Correct Answer: A) Trade deficit. 22. An import quota restricts the volume of imports much speedier and tighter than a tariff A) False. B) True. Show Answer Correct Answer: A) False. 23. International trade in intermediate goods is a major part of total merchandise trade. A) True. B) It depends on a data source. C) It depends on an exchange rate. D) False. Show Answer Correct Answer: A) True. 24. Taiwanese baseballs sell in the US for $ 10, but an identical domestically made one sells for $ 12.50. If the US government imposes a 20% tariff on Taiwanese baseballs, what would be the result? A) Since the Taiwanese ball would still be cheaper, there would be little to no change. B) Since the Taiwanese ball is now more expensive, US sales will likely increase. C) Since the Taiwanese ball will now sell at the same price as the US ball, sales will likely equalize. D) Since the Taiwanese ball is now more expensive, the US will begin exporting balls to Taiwan. Show Answer Correct Answer: A) Since the Taiwanese ball would still be cheaper, there would be little to no change. 25. A problem encountered when implementing an "infant industry" tariff is that A) Domestic consumers will purchase the foreign good regardless of the tariff. B) The industry may never "mature.". C) Most industries require tariff protection when they are mature. D) The tariff may hurt the industry's domestic sales. Show Answer Correct Answer: B) The industry may never "mature.". 26. A feasible effect of international trade is that a A) Monopoly in the home market becomes an oligopoly in the world market. B) Purely competitive firm in the home market becomes an oligopolist. C) Purely competitive firm in the home market becomes a monopolist. D) Oligopoly in the home market becomes an monopoly in the world market. Show Answer Correct Answer: A) Monopoly in the home market becomes an oligopoly in the world market. 27. Prices at which currencies are traded is called ..... A) Exchange Currency. B) Exchange Rate. C) Foreign Exchange Market. D) Local Currency Demand. Show Answer Correct Answer: B) Exchange Rate. 28. Trade balance and balance of payment experience a ..... condition if the local currency is overvalued. A) Good. B) Worse. Show Answer Correct Answer: B) Worse. 29. What is the impact of a quota on imported goods? A) Prices will decrease. B) Employment will increase. C) Government tariff revenues will increase. D) There will be efficiency gains. Show Answer Correct Answer: B) Employment will increase. 30. Putting policies in place that are designed to protect domestic industries from too much foreign competition. A) Free trade. B) Patriotism. C) Protectionism. D) Economic stabalism. Show Answer Correct Answer: C) Protectionism. ← 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