This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 130 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 130 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An Open Economy is one where A) There is a restriction on buying and selling of goods. B) Where a country engages in international trade. C) Consumers will be given less choice. D) Where we have visible but not invisible trade. Show Answer Correct Answer: B) Where a country engages in international trade. 2. Tariffs are unambiguously pro-consumer and anti-producer. A) True. B) False. Show Answer Correct Answer: B) False. 3. What do teachers, doctors, tradesmen, miners, and farmers all have in common? A) They are all unemployed. B) They have no impact on the economy. C) They are all generalists in their respective fields. D) They are all specialists in their respective fields. Show Answer Correct Answer: D) They are all specialists in their respective fields. 4. Which theory considers bullion as a part of the international trade A) Modern theory of trade. B) Comparative cost advantage theory. C) Factor equalization theorem. D) Mercantilism. Show Answer Correct Answer: C) Factor equalization theorem. 5. An advantage of international trade:International trade can also expose firms to new ideas and skills-for example, an MNC might bring new manufacturing skills to a developing country. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 6. If the US and Britain have a zero current account balance, and the US inflation rate decreases relative to the inflation rate in Britain, how will US Exports, the US Current account balance, US RGDP and the FOREX Market for Dollar change? A) US exports increaseUS current account surplusUS real GDP increases Demand for USD$ increasesUSD appreciates. B) US exports decreaseUS current account deficitUS real GDP increases Demand for USD$ increasesUSD appreciates. C) US exports increaseUS current account deficitUS real GDP increases Demand for USD$ increasesUSD appreciates. D) US exports increaseUS current account surplusUS real GDP decreases Demand for USD$ increasesUSD appreciates. Show Answer Correct Answer: A) US exports increaseUS current account surplusUS real GDP increases Demand for USD$ increasesUSD appreciates. 7. Australia benefits from international cooperation to support an open global economy and to protect the stability of the global financial system. A) False. B) True. Show Answer Correct Answer: B) True. 8. Bringing in goods and services from another country. A) Imports. B) Free trade. C) Exports. D) Globalization. Show Answer Correct Answer: A) Imports. 9. ASEAN was formed in year ..... A) 1967. B) 1957. C) 1947. D) 1977. Show Answer Correct Answer: A) 1967. 10. A country produces one product at a fast pace and can do what they do best and trade for the rest, this is called what? A) COMPARATIVE ADVANTAGE. B) CURRENCY EXCHANGE. C) TARIFFS. D) SPECIALIZATION. Show Answer Correct Answer: D) SPECIALIZATION. 11. Friedman states that the businesses should behave in an ethical manner and not engage in deception and fraud. A) False. B) True. Show Answer Correct Answer: B) True. 12. Question 4:True or FalseLetter of Credit is not only safer for exporters, but also less time-consuming than other methods of payment. A) True. B) False. Show Answer Correct Answer: B) False. 13. It is a restriction set by the government on the quantity of goods that can be exported out of a country during a specified period of time. A) Voluntary Export Restraint (VER). B) The Agreement on Textiles and Clothing (ATC). C) Trade-Related Aspects of Intellectual Property Rights (TRIPS). D) The General Agreement on Trade in Services (GATS). Show Answer Correct Answer: A) Voluntary Export Restraint (VER). 14. If Great Britain has a comparative advantage over France in the production of cars, which of the following is true? A) Britain and France should not trade. B) Britain should export cars to France. C) Neither Britain nor France will gain from trade. D) France should export cars to Britain. Show Answer Correct Answer: B) Britain should export cars to France. 15. When the value of export exceeds the value of import, it is considered ..... A) Favourable balance. B) Import. C) Fair trade. D) Unfavourable balance. Show Answer Correct Answer: A) Favourable balance. 16. Dunning suggests that FDI will occur when there is an ownership advantage, a location advantage, and an internalization advantage. A) False. B) True. Show Answer Correct Answer: B) True. 17. If the U.S. Government places a tariff on all imported cars; who will benefit? A) Domestic producer. B) Domestic consumer. C) Foreign producer. D) None of above. Show Answer Correct Answer: A) Domestic producer. 18. The imposition of a tariff will: A) Shift supply curve to the left. B) Shift supply curve to the right. C) Shift demand curve to the left. D) Shift demand curve to the right. Show Answer Correct Answer: A) Shift supply curve to the left. 19. The following is a list of factors that are used to determine a country's? Household income. General health of a population. Life expectancy of the members of a population. Availability and quality of housing. Level of crime. Access to health care. Access to education. Access to social services. A) Infrastructure. B) Standard of living. C) Specialization. D) Balance of trade. Show Answer Correct Answer: B) Standard of living. 20. Protectionism is the elimination of barriers to trade to create large open markets for good and services. A) True. B) False. Show Answer Correct Answer: B) False. 21. Taxes or duties imposed on imported goods, affecting trade costs A) Imports. B) Tariffs. C) Free Trade. D) Exports. Show Answer Correct Answer: B) Tariffs. 22. The international market is normally so much larger than the firm's domestic market that exporting is nearly always a way to increase the revenue and profit base of a company. A) False. B) True. Show Answer Correct Answer: B) True. 23. The United States is not a party to any trade agreements worldwide and considers free trade to be dangerous A) True. B) False. Show Answer Correct Answer: B) False. 24. What is the role of international trade in fostering global cooperation? A) Restricting diplomatic relations among countries. B) Promoting isolationism and protectionism. C) Fostering economic interdependence and peaceful relations among nations. D) Limiting opportunities for cultural exchange and mutual understanding. Show Answer Correct Answer: C) Fostering economic interdependence and peaceful relations among nations. 25. Explain the concept of free trade and its impact on global economy. A) Free trade is the imposition of tariffs and quotas between countries to restrict the exchange of goods and services. B) Free trade is the unrestricted exchange of goods and services between countries without the imposition of tariffs, quotas, or other restrictions. It can lead to increased economic efficiency, lower prices for consumers, and greater economic growth. However, it can also lead to job displacement and income inequality in some industries and countries. C) Free trade has no impact on the global economy and does not affect economic efficiency or growth. D) Free trade only benefits a few select industries and does not lower prices for consumers. Show Answer Correct Answer: B) Free trade is the unrestricted exchange of goods and services between countries without the imposition of tariffs, quotas, or other restrictions. It can lead to increased economic efficiency, lower prices for consumers, and greater economic growth. However, it can also lead to job displacement and income inequality in some industries and countries. 26. What is the term for the coordination of production between different parts of a multinational? A) Interfirm trade. B) Domestic trade. C) International trade. D) Intrafirm trade. Show Answer Correct Answer: D) Intrafirm trade. 27. A disadvantage of specialisation:Countries are vulnerable to cuts in the supply of goods that they don't produce themselves. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 28. Companies that want to succeed in international trade must A) No need to adapt their business strategy. B) Understand cultural and legal differences in target markets. C) Ignoring the needs of local consumers. D) Focus only on low production costs. Show Answer Correct Answer: B) Understand cultural and legal differences in target markets. 29. One of the major pillars upon which the practice of mercantilism rested was ..... A) Trade surpluses. B) Excessive imports. C) Pricing mechanism. D) Economies of scale. Show Answer Correct Answer: A) Trade surpluses. 30. Leontief found that A) United States. exports are capital intensive relative to United States imports. B) United States imports are labour intensive relative to United States exports. C) United States exports are neither labour nor capital intensive. D) None of the above. Show Answer Correct Answer: D) None of the above. ← 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