This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Quota is a legal limit imposed on the amount of a good that may be imported. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 2. Relationship between a countries exports and imports A) Balance of trade. B) Surplus. C) Trade surplus. D) The trade fails. Show Answer Correct Answer: A) Balance of trade. 3. If you want the cheapest manufacturing go to A) Brazil. B) China. C) India. D) USA. Show Answer Correct Answer: B) China. 4. Which do you want more of? A) Imports. B) Exports. C) None. D) None of above. Show Answer Correct Answer: B) Exports. 5. The rate for currencies exchanged today for delivery in the future, usually up to180 days A) Fixed Exchange Rate. B) Forward Rate. C) Spot Rate. D) Floating Exchange Rate. Show Answer Correct Answer: B) Forward Rate. 6. Malaysia, Vietnam, Singapore and Brunei are members of the Trade Regime to the TPPA A) YES. B) NO. Show Answer Correct Answer: A) YES. 7. The ability to produce more units of a good or service than some other producer, using the same amount of resources. A) Comparative advantage. B) Interdependence. C) Specialization. D) Absolute advantage. Show Answer Correct Answer: D) Absolute advantage. 8. Exceptions to the principle of non-discrimination in international trade are called: A) Inclusions. B) Exceptions. C) Specialization. D) All wrong. Show Answer Correct Answer: B) Exceptions. 9. Without charge to consignee = sin cargo al destinatario A) False. B) True. Show Answer Correct Answer: B) True. 10. Helps work out trade issues between countries A) Labor unions. B) WTO-World Trade Organization. C) NAFTA-North American Free Trade Agreement. D) EU-European Union. Show Answer Correct Answer: B) WTO-World Trade Organization. 11. Countries can trade..... A) Goods. B) Services. C) Neither. D) Both goods and services. Show Answer Correct Answer: A) Goods. 12. You are a business consultant specializing in International Trade. After your presentation, you opened the floor for questions and you received the following queries. How would you answer the following questions?Compare between international trade and local trade. A) Doing business internationally is not the same as doing business at home. There are new skills to learn and new knowledge to acquire about the country you will be going into. There will be different laws and regulations, the different customer buying habits, marketing strategies and materials to appeal to the new country. B) CulturesNo two cultures are the same and understanding both the social and business culture in another country is the first key to success. Culture defines everything a society does, from its business practices, to its response to advertising and marketing, to negotiating sales. C) Level of CompetitionThe level of competition you will experience in foreign markets is likely to be more dynamic and complex than you experience in domestic markets. D) Politics/Government/Legal SystemsEach government has its own policies relating to foreign firms and products. The key is to understand that once you are in a foreign market you must abide by the rules and laws of that country, not the ones in your own market. International Lawis a gentlemen's agreement which is honoured, but not always. For example in areas such as intellectual property, although there are many agreements in place, protecting intellectual property can be time consuming and costly. TechnologyIf your product or service requires a high degree of technology sophistication to use or implement, then markets with low levels of technology will not be suitable for your busines. E) All the above. Show Answer Correct Answer: E) All the above. 13. In the small-country model, a tariff will cause A) A decrease in consumer surplus, a decrease in producer surplus, an increase in government revenue, and a deadweight loss that increases social welfare. B) A decrease in consumer surplus, a decrease in producer surplus, a decrease in government revenue, and a deadweight loss that increases social welfare. C) A decrease in consumer surplus, an increase in producer surplus, an increase in government revenue, and a deadweight loss that decreases social welfare. D) An increase in consumer surplus, a decrease in producer surplus, a decrease in government revenue, and a deadweight loss that decreases social welfare. Show Answer Correct Answer: C) A decrease in consumer surplus, an increase in producer surplus, an increase in government revenue, and a deadweight loss that decreases social welfare. 14. Cars imported into the United States must have certain safety features to be allowed on highways and roads. Which of the following trade barriers does this situation describe? A) Embargo. B) Quota. C) Standards. D) Tariffs. Show Answer Correct Answer: C) Standards. 15. To lead the development of Halal standards, audit and certification procedures in order to protect the integrity of Halal A) HDC. B) WHAT. C) MATRADE. D) MAY. Show Answer Correct Answer: A) HDC. 16. It is a subfield of international economics that focuses primarily on the real transactions in the international economy. A) International Money. B) International Tariff. C) International Trade. D) International Invetsment. Show Answer Correct Answer: C) International Trade. 17. Brazil is able to produce 10 cars and 5 computers in one hour while India is able to produce 1 car and 4 computers in one hour. Brazil has a comparative advantage in producing ....., and India has a comparative advantage in producing ..... A) Computers; cars. B) Computers; computers. C) Cars; computers. D) Cars; cars. Show Answer Correct Answer: C) Cars; computers. 18. The largest item of Indian import list is ..... A) Computers. B) Machinery. C) Consumer goods. D) Petroleum. Show Answer Correct Answer: D) Petroleum. 19. A barrier is meant to A) Encourage the flow of trade. B) Block or slow down trade. C) Make people obey the government. D) None of above. Show Answer Correct Answer: B) Block or slow down trade. 20. What is Trade agreements? A) Trade agreements are when two or more nations agree on the terms of trade between them. B) Trade agreements determine the tariffs or taxes and duties countries impose on imports and exports. C) For this reason when most people say trade agreements they mean international trade agreements. D) 1 & 3. E) 1, 2 & 3. Show Answer Correct Answer: E) 1, 2 & 3. 21. The ideal goal of international trade A) Globalization. B) Balance of Trade. C) International Trade. D) International Relation. Show Answer Correct Answer: B) Balance of Trade. 22. What does a trademark protect? A) An invention. B) A work of art. C) Logos, names and brands. D) The look, shape and feel of a product. E) A secret formula. Show Answer Correct Answer: C) Logos, names and brands. 23. Explain how Documentary Credit works under Al-Murabahah contract: A) Al-Murabahah i.e. DC issued on "cost plus" basis, where the supplier and manufacturer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The supplier and manufacturer acts as an agent of the bank as far as the goods are concerned. B) Al-Murabahah i.e. DC issued on "cost plus" basis, where the exporter will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The exporter acts as an agent of the bank as far as the goods are concerned. C) Al-Murabahah i.e. DC issued on "cost plus" basis, where the importer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The importer acts as an agent of the bank as far as the goods are concerned. D) All the above. Show Answer Correct Answer: C) Al-Murabahah i.e. DC issued on "cost plus" basis, where the importer will pay the bank that issued the DC on a differed basis, a sum that equals the cost of the goods as imported plus the bank's profit for agreeing to issue the DC. The importer acts as an agent of the bank as far as the goods are concerned. 24. Which factor is country risk? A) Goods are not insured properly. B) Sale contract is incomplete or incorrect. C) A bank's ability to settle its debts for reasons other than country risk. D) Changes in Government policies. Show Answer Correct Answer: D) Changes in Government policies. 25. The situation in which two or more governmentscharge tax on the same income or property: A) Investment. B) International agreement. C) Double taxation. D) Enforcement. Show Answer Correct Answer: C) Double taxation. 26. If nations specialize according to their comparative advantage and engage in trade with each other, each nation can: A) Consume beyond its ability to produce. B) Produce beyond its ability to produce. C) Shift its production possibilities curve to the left. D) Produce more of all goods. Show Answer Correct Answer: A) Consume beyond its ability to produce. 27. Which of the following are results of tariffs and quotas? A) Increasing prices consumers pay for goods. B) Protecting foreign industry. C) Smothering third-world development. D) Reducing trade surpluses. Show Answer Correct Answer: A) Increasing prices consumers pay for goods. 28. With the establishment of WHO, entry requirements of domestic countries to MNCs are not followed. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 29. There are 7 important concepts in PAB. The concept that involves the establishment of trading blocs and agreement on export and import matters is the concept ..... A) Globalization. B) Borderless world. C) South-south. D) Emerging market. Show Answer Correct Answer: B) Borderless world. 30. Commercial impulses A) Counter purchase. B) Boost trades. C) Coutertrade. D) Trade drives. Show Answer Correct Answer: D) Trade drives. 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