This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 17 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Country's total amount of exports minus the total amount of imports A) Balance of Payments. B) Tariff. C) Foreign Exchange Rate. D) Balance of Trade. Show Answer Correct Answer: D) Balance of Trade. 2. What do countries achieve when engaging in trade? A) Economies of Sales. B) Economies of Scrolls. C) Economies of Scale. D) Economies of Scraps. Show Answer Correct Answer: C) Economies of Scale. 3. Specialization increases A) Comparative advantage. B) Interdependence. C) Specialization. D) Productivity. Show Answer Correct Answer: D) Productivity. 4. This is less aggressive why do firms expand internationally and often reactionary tactics in response to changing conditions that must be adapted to order to protect and hold a firm's market power or competitive position ..... A) STRATEGIC MOTIVE. B) DEFENSIVE MOTIVES. C) ECONOMIC MOTIVE. D) MARKET MOTIVE. Show Answer Correct Answer: B) DEFENSIVE MOTIVES. 5. Define riba and its application in Islamic banking A) The literal translation of the word "riba" is "decrease" or "deficit" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. B) The literal translation of the word "riba" is "increase" or "excess" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. C) The literal translation of the word "riba" is "increase" or "excess" , which is applicable under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of not sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. D) 1 & 3. E) All the above. Show Answer Correct Answer: B) The literal translation of the word "riba" is "increase" or "excess" , which is forbidden under the Syariah law. Islamic banking is governed under the Syariah law. Hence any accrued interest for deposit and/or loan that is predetermined, which is considered as an "increase" or "excess" , is prohibited. Nevertheless, any profit from business activity that involves a certain risk where the profit cannot be determined is allowed since it depends on the relative success of the businesses or entrepreneurial activities. The element of sharing the undeterminable profit is allowed and does not contravene the Islamic principles and is acceptable in Islamic banking. 6. Which of the following is not an argument against trade protection? A) In most cases, consumers lose. B) Foreign producers are worse off. C) Trade protection reduces government revenue. D) Trade protections reduce efficiency. Show Answer Correct Answer: C) Trade protection reduces government revenue. 7. Why is it difficult to determine comparative advantages between just two countries in today's global economy? A) Because many goods have inputs from multiple factories in different countries. B) Because goods are often not perfectly identical and consumers are willing to pay more for higher quality. C) Because countries do not specialize in producing the good with the lowest opportunity cost. D) Because perfect information about prices, costs, and productivity of all goods and services in large global markets is almost impossible to obtain. Show Answer Correct Answer: A) Because many goods have inputs from multiple factories in different countries. 8. Which one of the following statements is true regarding the way in which a lack of property rights can act as a barrier to growth and development A) The rents are too high on accommodation for existing workers to be able to afford to live in the city. B) Geographical immobility of labour means that workers cannot afford to move to where the job vacancies are. C) A scarce resource is depleted to extinction because it had zero cost to the users. D) A scarce resource is depleted to extinction because the owner has sold it too cheaply. Show Answer Correct Answer: C) A scarce resource is depleted to extinction because it had zero cost to the users. 9. National competitive advantage is created through opportunities and pressures created by: A) Resource endowment in terms of natural and human resources. B) Sophistication and scale of domestic demand. C) Strategies, structure, and rivalry of domestic competitors. D) Availability-related and supporting industries. E) All the above is correct. Show Answer Correct Answer: E) All the above is correct. 10. Which trade terms pose the highest risk for Importer? A) Open account trade. B) Unconfirmed letter of credit. C) Cash in advance. D) None of above. Show Answer Correct Answer: C) Cash in advance. 11. Which of the following is a reason for importing A) INCREASE SALES / PROFITS. B) INTENSE COMPETITION. C) CHOICE AND VARIETY. D) SURVIVAL. Show Answer Correct Answer: C) CHOICE AND VARIETY. 12. What is product life cycle theory for international trade? A) Trade between countries takes place because each country has different levels of resource intensity. B) International trade takes place because countries are at different stages of production levels. C) Trade between countries is determined by the availability of related and supported industries. D) Trade between countries is determined by similar comparative advantage to exchange similar products. Show Answer Correct Answer: B) International trade takes place because countries are at different stages of production levels. 13. What argument for protection believes that new or emerging industries should be protected. A) National Defense. B) Keeping money at Home. C) Infant Industry. D) Protecting domestic jobs. Show Answer Correct Answer: C) Infant Industry. 14. What percentage of total U.S. imports is accounted for by intrafirm imports? A) 40%. B) 30%. C) 10%. D) 20%. Show Answer Correct Answer: A) 40%. 15. Which economic actor would most likely not support free trade? A) McDonalds. B) Nike. C) Coastal Lumber Company. D) Coca Cola. Show Answer Correct Answer: C) Coastal Lumber Company. 16. Methods of protectionismComplete or partial prohibition of commerce and trade with a particular country in order to isolate it A) Non-competitive purchasing by governments. B) Embargoes. C) Quotas. D) Tariffs. E) VER. Show Answer Correct Answer: B) Embargoes. 17. What are items transported into a country from a foreign country? A) Exports. B) Embargoes. C) Subsidies. D) Imports. Show Answer Correct Answer: D) Imports. 18. Irish people going on holiday to Spain is an example of a ..... A) Visible export. B) Invisible import. C) Invisible export. D) Visible import. Show Answer Correct Answer: B) Invisible import. 19. ..... is the oldest International Trade theory. A) Product Life Cycle Theory. B) Theory of Absolute Cost advantage. C) Mercantilism Theory. D) Country Similarity Theory. Show Answer Correct Answer: C) Mercantilism Theory. 20. The WTO (World Trade Organization) is the ..... organization devoted to promoting international trade. A) Largest. B) Smallest. Show Answer Correct Answer: A) Largest. 21. Legal limit on the amount of a good that can be imported into a country. A) Embargo. B) Quota. Show Answer Correct Answer: B) Quota. 22. The goods and services a country decides to export is determined by what types of advantages? A) Quality and Quantity. B) Authentic and Comparative. C) Absolute and Collective. D) Absolute and Comparative. Show Answer Correct Answer: D) Absolute and Comparative. 23. A person who puts money into a project to earn a profit. A) Investor. B) Invesstor. C) Infestor. D) Invest. Show Answer Correct Answer: A) Investor. 24. Which of the following trade agreements has been primarily associated with the European Union (EU)? A) ASEAN. B) Schengen agreement. C) NAFTA (now USMCA). D) MERCOSUR. Show Answer Correct Answer: B) Schengen agreement. 25. Producer sells a product below the sale price of their home market A) Dumping. B) Surplus. C) Deficit. D) Gouging. Show Answer Correct Answer: A) Dumping. 26. The process by which people and goods move easily across borders. A) International Trade. B) Export. C) Import. D) Globalization. Show Answer Correct Answer: D) Globalization. 27. What is the difference between nations exports and imports? A) Real GDP. B) Absolute Advantage. C) Balance of Trade. D) Comparative Advantage. Show Answer Correct Answer: C) Balance of Trade. 28. Abigail is planning to study abroad and she needs to exchange her local currency for the currency of the country she's going to. She's wondering where she can do this. What is the market called where international currencies are bought and sold? A) Foreign exchange market:A market where international currencies are bought and sold. B) A market where goods and services are traded between countries. C) A market where labor and capital are exchanged. D) A market where natural resources are bought and sold. Show Answer Correct Answer: A) Foreign exchange market:A market where international currencies are bought and sold. 29. This department deals with complaints and faulty products A) Research and Development. B) Purchasing. C) Quality control. D) None of above. Show Answer Correct Answer: C) Quality control. 30. The firm that enters into a turnkey deal will have no long-term interest in the foreign country. A) True. B) False. Show Answer Correct Answer: A) True. ← 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