This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 14 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The following are the government's efforts to improve the creative economy, except..... A) Protection of the community's Intellectual Property Rights (IPR). B) Education and training for workers. C) Increasing the recruitment of members from abroad. D) Market development and promotional facilities. Show Answer Correct Answer: C) Increasing the recruitment of members from abroad. 2. Buying goods and services from another country is considered? A) Exporting. B) Importing. Show Answer Correct Answer: B) Importing. 3. When a country is not able to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good, it is said to have a(n) ..... A) Absolute advantage. B) Resource advantage. C) First-mover advantage. D) Comparative advantage. Show Answer Correct Answer: D) Comparative advantage. 4. Absolute advantage is a relative advantage in one economic activity that one nation enjoys in comparison with other nations. A) False. B) True. Show Answer Correct Answer: A) False. 5. The ..... proposes that tariffs be imposed on imported manufactured goods to give domestic firms temporary protection from foreign competition until they could fully establish themselves. A) Industrial policy. B) Maintenance of existing jobs. C) Infant industry argument. D) National defense argument. Show Answer Correct Answer: C) Infant industry argument. 6. What is the main purpose of using a Mexican customs broker? A) To expedite the clearance process at Mexican ports. B) To minimize tariffs and duties on imported goods. C) To avoid penalties for non-compliance with Mexican customs regulations. D) To facilitate communication between importers/exporters and Mexican authorities. Show Answer Correct Answer: D) To facilitate communication between importers/exporters and Mexican authorities. 7. Assistance given to a country in need, in term of money, goods, or services is called: A) Foreign aid. B) Foreign nations. C) Foreign exchange. D) Foreign policy. Show Answer Correct Answer: A) Foreign aid. 8. How the Creative Economy Provides Welfare to Society A) Big capital. B) Harm. C) Profitable. D) Only for large businesses. Show Answer Correct Answer: C) Profitable. 9. What does the European Union ensure for all of its citizens? A) Natural rights and equality. B) Human rights and equality. C) Equal wages and a job. D) Shelter and food. Show Answer Correct Answer: B) Human rights and equality. 10. The most important argument in favour of international trade is A) Comparative advantage. B) Historical trade patterns. C) Absolute advantage. D) Low transportation costs. Show Answer Correct Answer: A) Comparative advantage. 11. Which of the following correctly identifies the difference between economic growth and economic development A) Economic development relates to an increase in real national income whereas economic growth relates to improvements in the quality of living standards and wellbeing. B) Economic growth relates to an increase in real national income whereas economic growth relates to improvements in the quality of living standards and wellbeing. C) Economic development relates to per capita income levels whereas economic growth relates to an increase in the freedoms and choices available to individuals. D) Economic growth relates to an increase in the Gini coefficient whereas economic development relates to increases in the state of technology employed in the agricultural sector. Show Answer Correct Answer: B) Economic growth relates to an increase in real national income whereas economic growth relates to improvements in the quality of living standards and wellbeing. 12. Goods or services bought from foreign nations. A) Imports. B) Exports. Show Answer Correct Answer: A) Imports. 13. The importance of international trade was recognized by Adam Smith & David Ricardo A) True. B) False. Show Answer Correct Answer: A) True. 14. It means the seller is responsible for the goods until they are loaded. The seller must pay all costs related to getting the goods to port and onto vessel. A) INCOTERMS-FREE ON BOARD. B) INCOTERMS-COST & FREIGHT (CFR). C) INCOTERMS-COST INSURANCE FREIGHT (CIF). D) None of above. Show Answer Correct Answer: A) INCOTERMS-FREE ON BOARD. 15. They provide certainty to apply the preference of tariff or non-tariff benefits, based on the regional manufacturing composition of a good. There is no standard for the determination of its formula, it depends on the interests and negotiations between the signatory countries of an FTA. A) Relief of duties. B) Non tariff regulations. C) Trade of services. D) Rules of Origin. Show Answer Correct Answer: D) Rules of Origin. 16. An open economy is ..... A) An economy which sells goods freely but not services. B) An economy which sells services freely but not goods. C) An economy which sells goods and services freely. D) An economy which does not sell goods and services freely. Show Answer Correct Answer: C) An economy which sells goods and services freely. 17. Which countries is NAFTA with? A) US, Germany, Canada, Mexico. B) US, Germany, Mexico. C) US, Canada, Mexico. D) US, Germany, Canada. Show Answer Correct Answer: C) US, Canada, Mexico. 18. One role of multinational corporations in globalisation is to A) Produce and sell in many countries. B) Restrict the transfer of workers skills between nations. C) Increase the costs of global branding. D) Obstruct the international division of labour and corresponding efficiency gains. Show Answer Correct Answer: A) Produce and sell in many countries. 19. The most appropriate definition of trade protectionism is: A) Government policies that deliberately restrict the level of foreign competition in local markets. B) Government policies that deliberately restrict Australian producers selling goods or services overseas. C) The government protecting Australian citizens from harmful overseas goods and services. D) Increased spending on military equipment by the government. Show Answer Correct Answer: A) Government policies that deliberately restrict the level of foreign competition in local markets. 20. The U.S. limits the amount of wool suits that Macedonia can ship to the U.S. A) Tariff. B) Quota. C) Embargo. D) Subsidy. Show Answer Correct Answer: B) Quota. 21. Identify the theory that predicts that countries will export those goods that make intensive use of factors that are locally abundant. A) Theory of Comparative Advantage. B) Heckscher-Ohlin theory. C) Ricardo's Theory. D) New Trade Theory. Show Answer Correct Answer: B) Heckscher-Ohlin theory. 22. The United States increases its imports from Europe. What will be the effects on relative value of the Dollar and the Euro on the currency exchange market? A) The relative values of the dollar and euro will appreciate. B) The relative value of the dollar will depreciate and the euro will appreciate. C) The relative value of the dollar will appreciate and the euro will depreciate. D) The relative values of the dollar and euro will depreciate. Show Answer Correct Answer: B) The relative value of the dollar will depreciate and the euro will appreciate. 23. What did Swedish economists Eli Heckscher and Bertil Ohlin identify as a determinant of advantage in trade? A) Technology. B) Labor and capital. C) Government policies. D) Consumer demand. Show Answer Correct Answer: B) Labor and capital. 24. According to the letter of credit, what are the role of banks? A) (A) Money transfer. B) (B) Document handling. C) (C) Payment guarantee. D) (D) Setting seller's and buyer's obligations. E) Only (A), (B) & (C). Show Answer Correct Answer: E) Only (A), (B) & (C). 25. Why have US gas prices gone down considerably? A) Using comparative advantage with Russia. B) Trade with Saudi Arabia. C) Trade with Mexico. D) The US has become more efficient at producing our own gasoline. Show Answer Correct Answer: D) The US has become more efficient at producing our own gasoline. 26. What is a multinational company (MNC)? A) A corporation that operates in multiple countries and has a completely autonomous management system. B) A company that operates in only one country and has a decentralized management system. C) A company that operates in multiple countries but has no centralized management system. D) A corporation that operates in multiple countries and has a centralized management system. Show Answer Correct Answer: D) A corporation that operates in multiple countries and has a centralized management system. 27. A trade barrier utilized by countries may be A) Tariffs (taxes) on certain imports. B) Placing quotas on certain imports. C) The outright restriction of certain imports. D) All of these. Show Answer Correct Answer: D) All of these. 28. The danger of trade dependency is that ..... A) It often leads to the exploitation of developed countries. B) Political turmoils in a country might affect all dependent countries. C) The countries involved in trade often get into rivalry over trade tariff issues. D) ) it is difficult to end trade activities with current trade partners and find new trade partners. Show Answer Correct Answer: B) Political turmoils in a country might affect all dependent countries. 29. How are INCOTERMS in 2010 different from those in 2000? A) There are additional conditions from before. B) Same as before, changing the meaning of some conditions. C) Increase the severity of the liability. D) Reduce conditions. Show Answer Correct Answer: D) Reduce conditions. 30. Assume that all nations have low tariffs. Each country freely buys and sells to other countries. However, as a result of a rise in nationalism, each country imposes high tariffs. Which of the following would likely occur? A) Interdependence between nations will stay the same. B) Interdependence between nations will decrease. C) Standard of living in both nations will increase. D) Interdependence between nations will increase. Show Answer Correct Answer: B) Interdependence between nations will decrease. ← 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