This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Economics – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Economics Quiz 9 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How Plaza's supermarket deal with the blackout? A) Doing nothing. B) Invested in its own infrastructure. C) Using dynamo. D) None of above. Show Answer Correct Answer: B) Invested in its own infrastructure. 2. What was the name of the roadmap RBI called? A) Financial Sector Telecommunications Vision Document (2005). B) Financial Sector Technology Vision Document (2005). C) Financial Sector Science Vision Document (2005). D) Financial Sector Computing Vision Document (2005). Show Answer Correct Answer: B) Financial Sector Technology Vision Document (2005). 3. The product cycle theory of trade is essentially a A) Static, short run trade theory. B) Negative-sum theory of trade. C) Dynamic, long run trade theory. D) Zero-sum theory of trade. Show Answer Correct Answer: C) Dynamic, long run trade theory. 4. The deadweight loss of a tariff: A) Is not a social loss because society as a whole doesn't pay for the loss. B) Is a social loss since it reduces the revenue for the government. C) Is not a social loss since only business firms suffer revenue losses. D) Is a social loss since it promotes inefficient production. Show Answer Correct Answer: D) Is a social loss since it promotes inefficient production. 5. When the value of export is greater than the value of import, it is called ..... ? A) Trade surplus. B) Trade deficit. C) Protectionism. D) None of above. Show Answer Correct Answer: A) Trade surplus. 6. When the value of a nation's imports are greater than the value of its exports, the nation has ..... A) A favorable balance of trade. B) An unfavorable (negative) balance of trade. C) A positive balance of payments. D) A trade surplus. Show Answer Correct Answer: B) An unfavorable (negative) balance of trade. 7. The current account in the balance of payments consists of ..... A) Goods and services account and current transfer. B) Current transfer, direct investment and portfolio investment. C) Goods and service account, income account and current transfer. D) Income, current transfer, other investment and errors and omissions. Show Answer Correct Answer: C) Goods and service account, income account and current transfer. 8. Currency depreciation results in A) Decreased exports, decreased imports. B) Increased exports, increased imports. C) Increased exports, decreased imports. D) Decreased exports, increased imports. Show Answer Correct Answer: C) Increased exports, decreased imports. 9. The Panamanian balboa (currency) always exchanges at a rate of 1 balboa = 1 US dollar. The balboa has a(n) A) Floating exchange rate. B) Fixed exchange rate. C) Depreciating exchange rate. D) Appreciating exchange rate. Show Answer Correct Answer: B) Fixed exchange rate. 10. The value of a country's exports minus the value of its imports during a specific time. A) Export. B) Balance of trade. C) Trade Surplus. D) Import. Show Answer Correct Answer: B) Balance of trade. 11. Assume that Country A is relatively abundant in labor and Country B is relatively abundant in land. Note that wages are the returns to labor and rents are the returns to land. According to the factor price equalization theorem, once Country A begins specializing according to comparative advantage and trading with Country B A) Wages and rents should fall in Country A. B) Wages and rents should rise in Country A. C) Wages should rise and rents should fall in Country A. D) Wages should fall and rents should rise in Country A. Show Answer Correct Answer: C) Wages should rise and rents should fall in Country A. 12. ..... are the goods and services that a country produces domestically and sells to buyers in a foreign country A) Imports. B) Tariff. C) Trade. D) Exports. Show Answer Correct Answer: D) Exports. 13. An exchange rate is used to ..... A) Promote the use of subsidies on foreign goods. B) Determine the process of one country's imports in terms of another country's exports. C) Promote the argument supporting free trade. D) Determine the price of one country's currency in terms of another country's currency. Show Answer Correct Answer: D) Determine the price of one country's currency in terms of another country's currency. 14. Which of the following is an example of an institution whose primary concern is global economic stability? A) The World Bank. B) OPEC. C) WTO. D) IMF. Show Answer Correct Answer: D) IMF. 15. The principal benefit of tariff protection goes to: A) Foreign producers of the good produced. B) Domestic producers of the good produced. C) Foreign consumers of the good produced. D) Domestic consumers of the good produced. Show Answer Correct Answer: B) Domestic producers of the good produced. 16. The theory of relative advantage is A) It is in their interests to help countries increase exports and limit imports. B) Specialization in the production of goods that have achieved the greatest efficiency for the country and export, exchanging them for goods with a minimum advantage of the country. C) He says that the country should consume only what it produces. D) Taxing imports is a means of creating jobs and increasing the country's income. Show Answer Correct Answer: B) Specialization in the production of goods that have achieved the greatest efficiency for the country and export, exchanging them for goods with a minimum advantage of the country. 17. The US bans beef imports from Canada after a Mad Cow Disease outbreak there. This is an example of which type of barrier to trade? A) Standards. B) Quota. C) Subsidy. D) Tariff. Show Answer Correct Answer: A) Standards. 18. A closed economy is one in which: A) Domestic firms invest in industries overseas. B) Imports exactly equal exports, so that trade is balanced. C) The home economy is isolated from foreign trade. D) Saving exactly equals investment at full employment. Show Answer Correct Answer: C) The home economy is isolated from foreign trade. 19. What is "The ability to produce more goods/services than another country" ? A) Absolute Advantage. B) Comparative Advantage. C) Embargo. D) Standards. Show Answer Correct Answer: A) Absolute Advantage. 20. It takes Mrs. Lee 5 hours to quilt a blanket. It takes Mr. Mosley 2 hours to quilt a blanket. A) Mrs. Lee has a comparative advantage in blanket making. B) Mr. Mosley has an absolute advantage in blanket making. C) Mr. Mosley has a comparative advantage in blanket making. D) Mrs. Lee has an absolute advantage in blanket making. Show Answer Correct Answer: B) Mr. Mosley has an absolute advantage in blanket making. 21. If the trade price is higher than the domestic price, then the country will: A) Does not carry out international trade. B) Importing goods from other countries. C) Increase the price of goods in the domestic market. D) Export goods to other countries. E) Lowering the price of goods in the domestic market. Show Answer Correct Answer: D) Export goods to other countries. 22. What countries are involved in NAFTA? A) Mexico, Latin America, America. B) America, Canada, Mexico. C) Brazil, Mexico, America. D) Canada, America, Latin America. Show Answer Correct Answer: B) America, Canada, Mexico. 23. An ..... is a government order that restricts the exchange of goods with a specified country. A) Subsidy. B) Quota. C) Tariff. D) Embargo. Show Answer Correct Answer: D) Embargo. 24. Higher price levels in the UK would result in A) Increased exports and appreciation of the £. B) Increased exports and depreciation of the £. C) Increased imports and an appreciation of the £. D) Increased imports and depreciation of the £. Show Answer Correct Answer: D) Increased imports and depreciation of the £. 25. What is described as a policy in which there is no government regulation and countries may trade as they please? A) Exports. B) Balance of trade. C) Free trade. D) Imports. Show Answer Correct Answer: C) Free trade. 26. A tariff-rate quota A) Is a limit on the number of tariffs that a country can place on imports. B) Is a two-tier tariff system intended to restrict imports. C) Uses a single tariff along with import quotas to restrict imports. D) Is designed to avoid the price increases caused by simple tariffs. Show Answer Correct Answer: B) Is a two-tier tariff system intended to restrict imports. 27. What is "The ability to produce at a lower opportunity cost than another country" ? A) Quota. B) Absolute Advantage. C) Subsidy. D) Comparative Advantage. Show Answer Correct Answer: D) Comparative Advantage. 28. International trade in goods and services is sometimes used as a substitute for all of the following except: A) International movements of capital. B) International movements of labor. C) International movements of technology. D) Domestic production of different goods and services. Show Answer Correct Answer: D) Domestic production of different goods and services. 29. Which of the following policies permits a specific quantity of goods to be imported at tariff rate and applies a higher tariff rate to imports above company? A) Quota. B) Import tariff. C) Specific tariff. D) All of the above. Show Answer Correct Answer: C) Specific tariff. 30. The benefit or advantage of an economy to be able to produce a commodity at a lesser opportunity cost than other entities is referred to as A) Growth. B) Comparative Advantage. C) Absolute Advantage. D) Opportunity Cost. Show Answer Correct Answer: B) Comparative Advantage. ← 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