This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 128 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 128 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Who has the comparative advantage for capes? A) Avalon. B) Camelot. Show Answer Correct Answer: B) Camelot. 2. What is the role of economies of scale in international trade? A) They limit the quantity of goods that can be imported. B) They enable domestic companies to produce goods at a lower average cost. C) They increase the price of imported goods. D) They protect domestic industries from foreign competition. Show Answer Correct Answer: B) They enable domestic companies to produce goods at a lower average cost. 3. The combination of logistics systems and information systems is a particularly potent source of cost expenditure in many enterprises A) True. B) False. Show Answer Correct Answer: B) False. 4. The World Trade Organization (WTO) oversees international agreements that attempt to A) Lower tariffs. B) Liberalise world trade. C) Increase world trade. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. Which is systematic record ofall the economic transactions between one country and rest of the world A) Budget. B) Balance of trade. C) Balance of payments. D) Balance of transactions. Show Answer Correct Answer: C) Balance of payments. 6. What is not a foreign policy goal? A) Promote world peace & democracy. B) National security & concerns of humanity. C) International trade. D) Global interdependence. Show Answer Correct Answer: D) Global interdependence. 7. How does international trade contribute to economic growth? A) By decreasing competition among countries. B) By limiting the availability of goods and services. C) By promoting specialization and comparative advantage. D) By isolating domestic markets from global trends. Show Answer Correct Answer: C) By promoting specialization and comparative advantage. 8. Developed nations have all of the following except A) Higher populations. B) Better health. C) Better education. D) High levels of technology. Show Answer Correct Answer: A) Higher populations. 9. In autarky, if the home country wants to produce and consume both goods, the relative goods prices will be ..... A) Equal to their relative unit labour requirements. B) Lower than their opportunity cost. C) Higher than their relative unit labour requirements. D) Lower than their relative unit labour requirements. Show Answer Correct Answer: A) Equal to their relative unit labour requirements. 10. This theme of international economics is concerned with the trade surpluses and trade deficit of a country. A) The Balance of Payments. B) The International Capital Market. C) The Pattern of Trade. D) The Gains from Trade. Show Answer Correct Answer: A) The Balance of Payments. 11. A ..... is a system under which the forces of supply and demand establish the value of one's currency relative to another country's currency A) Weighted exchange rate. B) Fixed exchange rate. C) Free market exchange rate. D) Floating exchange rate. Show Answer Correct Answer: D) Floating exchange rate. 12. Explain the concept of trade barriers and provide examples of different types of trade barriers. A) Trade barriers are government-imposed restrictions on the flow of international goods and services. Examples include tariffs, quotas, subsidies, and import licenses. B) Trade barriers are measures to promote fair competition and prevent monopolies. C) Examples of trade barriers include free trade agreements and open borders. D) Trade barriers are obstacles to prevent people from traveling internationally. Show Answer Correct Answer: A) Trade barriers are government-imposed restrictions on the flow of international goods and services. Examples include tariffs, quotas, subsidies, and import licenses. 13. What is included as part of the current account of the balance of payments? A all government income and expenditure B money withdrawn from a bank account C investments in other countries by manufacturers D trade in goods and services A) C. B) D. C) A. D) B. Show Answer Correct Answer: B) D. 14. *Firms can set the same prices across markets. These prices reflect trade costs as well as the level of competition perceived by the firm. A) True. B) False. Show Answer Correct Answer: B) False. 15. The Balance of Trade is A) Visible Imports-Visible Exports. B) Visible Exports-Visible Imports. C) Total Imports-Total Exports. D) Total Exports-Total Imports. Show Answer Correct Answer: B) Visible Exports-Visible Imports. 16. WHO ISSUES THE BILL OF LADING TO THE EXPORTER A) SHIPPING COMPANY. B) BANK. C) THE CAPTAIN OF SHIP. D) INSURANCE COMPANY. Show Answer Correct Answer: A) SHIPPING COMPANY. 17. When a country can produce something more efficiently, it has a A) Absolute advantage. B) Trade barrier. C) Comparative advantage. D) Global market. Show Answer Correct Answer: A) Absolute advantage. 18. What is the purpose of a tariff? A) To block dangerous goods from entering the country. B) To encourage consumers to buy goods made in their own country. C) To increase trade between two countries. D) To stop trade completely. Show Answer Correct Answer: B) To encourage consumers to buy goods made in their own country. 19. Many low-income countries rely on multinational companies (MNCs) to provide economic development. What is a disadvantage of this for the low-income country? A Local firms close because MNCs are more efficient. B New production techniques are introduced. C The balance of payments may improve. D The MNCs have to pay taxes on their profits. A) C. B) A. C) D. D) B. Show Answer Correct Answer: B) A. 20. The most appropriate factor that encouraged the birth of the following free trade organizations is..... A) There are differences in resources between countries. B) Discrimination by a country in international trade. C) Pave the way for a country to dominate the international market. D) Regulation of access to information and access to markets. Show Answer Correct Answer: C) Pave the way for a country to dominate the international market. 21. Which of the following is a trade organization made up of southeast Asian countries? A) WTO. B) NAFTA. C) European Union. D) ASEAN. Show Answer Correct Answer: D) ASEAN. 22. Temporary protection of domestic industries enables them to gain ..... ..... before competing with foreign industries: "infant industry argument" A) Sufficient experience. B) Adequate assets. C) Solid position. D) None of above. Show Answer Correct Answer: A) Sufficient experience. 23. What is a disadvantage of increasing international specialisation? A) Consumers pay higher prices for goods and services reducing their welfare. B) Domestic firms may be uncompetitive leading to structural unemployment. C) Domestic firms may experience rising costs as they pay more for imports. D) Resources may be used less efficiently as domestic firms face less competition. Show Answer Correct Answer: B) Domestic firms may be uncompetitive leading to structural unemployment. 24. Increases competition, allows domestic goods to be sold all over the world, allows country to expose comparative advantage through specialization. A) Arguments for free trade. B) Arguments against free trade. Show Answer Correct Answer: A) Arguments for free trade. 25. Which are known as the advantages of international trade? A) Opportunity to specialize. B) Encouraging exports and discouraging imports. C) Increase market share. D) Attracting foreign investor. Show Answer Correct Answer: A) Opportunity to specialize. 26. Which two of the following are arguments used by critics of free trade?a) Free trade does not take into consideration productivity differences between countries b) Free trade may lead to unemployment c) Free trade often ignores the effects of monopoly elements on consumer welfare d) Free trade can only work within trading blocs e) Free trade reduces international specialization A) And e). B) And c). C) And c). D) And e). Show Answer Correct Answer: B) And c). 27. Exchange rates show the value of one country's currency in relation to other countries' ..... A) Exports. B) Quotas. C) Currencies. D) Tariffs. Show Answer Correct Answer: C) Currencies. 28. Shipping allows timber products companies to expand their business growth and their ability to stay competitive in marketing their niche products in the long run. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 29. Which of the following situations would allow agents to gain from specialization and trade with one another? A) The terms of trade are between the two agents' opportunity costs. B) The agents have the same opportunity costs. C) One agent has absolute advantage in both goods. D) One agent has comparative advantage in both goods. E) Either agent has absolute advantage in either of the goods. Show Answer Correct Answer: A) The terms of trade are between the two agents' opportunity costs. 30. Purpose:To prevent too much of a good from entering a country A) Quota. B) Tariff. C) Embargo. D) None of above. Show Answer Correct Answer: A) Quota. ← PreviousNext →Related QuizzesInternational Economics QuizzesEconomics QuizzesInternational Trade Quiz 1International Trade Quiz 2International Trade Quiz 3International Trade Quiz 4International Trade Quiz 5International Trade Quiz 6International Trade Quiz 7International Trade Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books