This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 20 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Copying the original technology, producing imitative products, discourages foreign firms in expanding their business. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 2. A focus on developing only certain skills or producing only certain goods/services A) Exports. B) Specialization. C) Globalization. D) Imports. Show Answer Correct Answer: B) Specialization. 3. Interest rates in Japan have increased and are now higher than US interest rates. What would happen the value of the dollar? A) It would increase. B) It would decrease. C) It would remain the same. D) None of above. Show Answer Correct Answer: B) It would decrease. 4. What is the main purpose of tariffs in international trade? A) To encourage foreign investment. B) To promote free trade. C) To reduce import quotas. D) To raise government revenue. Show Answer Correct Answer: D) To raise government revenue. 5. What happens to an importer's and an exporter's businesses when the exchange rate depreciates? A) Imports become cheaper and exports become more expensive. B) Imports become more expensive and exports become cheaper. C) Both imports and exports become cheaper. D) Both imports and exports become more expensive. Show Answer Correct Answer: B) Imports become more expensive and exports become cheaper. 6. An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice A) The two countries must engage in international trade one with the other. B) Each country's marginal cost must equal that of the other country. C) The monopoly must lower prices in order to sell more. D) Each country's marginal cost must equal that of the other country. Show Answer Correct Answer: A) The two countries must engage in international trade one with the other. 7. The fifth assumption of Comparative Advantage Theory: ..... don't vary within the level of production and are proportional to the amount of ..... used. A) Costs-cash. B) Technologies-labor. C) Costs-labor. D) Labors-cash. Show Answer Correct Answer: C) Costs-labor. 8. Another term for craft is..... A) Craft. B) Design. C) Fashion. D) Advertising. Show Answer Correct Answer: A) Craft. 9. When something gives a location an initial advantage in a given industry, ..... "lock in" this advantage even after the circumstances that created the initial advantage are no longer relevant. A) Comparative advantage. B) Historical contingency. C) External economies of scale. D) None of above. Show Answer Correct Answer: C) External economies of scale. 10. What are administrative trade policies? A) Restrictions on the quantity of goods that may be imported. B) Payments made by the government to domestic producers. C) Taxes levied on imports. D) Bureaucratic rules that make it difficult for imports to enter a country. Show Answer Correct Answer: D) Bureaucratic rules that make it difficult for imports to enter a country. 11. The world price of feta cheese is above the domestic price in Greece in the absence of trade. With free trade, Greece would become an ..... of feta cheese. A) Exporter. B) Importer. Show Answer Correct Answer: A) Exporter. 12. Delivery of goods using containers where the delivery of goods in 1 container is owned by more than one sender (seller) and addressed to several consignees (buyers), is called..... A) Multiple Container. B) Full Container Load. C) Stripping. D) Less Container Load. Show Answer Correct Answer: D) Less Container Load. 13. What is one advantage of establishing trade barriers rather than allowing free trade? A) The protection of domestic industries. B) The improvement of foreign relations. C) An increase in local regulations. D) A reduction in foreign product prices. Show Answer Correct Answer: A) The protection of domestic industries. 14. Buying and selling goods across borders A) Protectionism. B) Free Trade. C) International Trade. D) Absolute Advantage. Show Answer Correct Answer: C) International Trade. 15. Because of international trade, there is a wider variety of goods available. A) False. B) True. Show Answer Correct Answer: B) True. 16. Country A produces a ton of coffee using one unit of resources. Country B produces two tons of coffee using one unit of resources. Which of the following is true regarding Country A and Country B? A) Country B has an absolute advantage in producing coffee. B) Both Country A and Country B have an absolute advantage in producing coffee. C) Neither Country A nor Country B has an absolute advantage in producing coffee. D) Country A has an absolute advantage in producing coffee. Show Answer Correct Answer: A) Country B has an absolute advantage in producing coffee. 17. Trade restrictions hurt A) Consumers. B) Workers in exporting industries. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 18. What is the purpose of tariffs? A) To raise government revenues. B) To protect domestic producers. C) To force consumers to pay more for certain imports. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. This instrument in Trade Policy is a policy that partially or entirely restricts the export of a good. A) Import Ban. B) Export Ban. C) Import Tariff Ban. D) Export Tariff Ban. Show Answer Correct Answer: B) Export Ban. 20. If the level of imports (M) exceeds exports (X) then the level of economic activity (output and income) will A) Expand. B) Will initially expand then contract. C) Remain neutral. D) Contract. Show Answer Correct Answer: D) Contract. 21. Laws which recognize health and safety requirements on imported goods A) OSHA. B) ACLU. C) Department Health Education & Welfare. D) Standards. Show Answer Correct Answer: D) Standards. 22. What is comparative advantage in international trade? A) Ability of a country to produce a good or service without considering opportunity cost. B) Ability of a country to produce a good or service at a lower opportunity cost than other countries. C) Ability of a country to produce a good or service at the same opportunity cost as other countries. D) Ability of a country to produce a good or service at a higher opportunity cost than other countries. Show Answer Correct Answer: B) Ability of a country to produce a good or service at a lower opportunity cost than other countries. 23. Trade Deficit occurs when: A) Exports exceed imports. B) Imports exceed exports. C) There is a balance between imports and exports. D) There is no international trade. Show Answer Correct Answer: B) Imports exceed exports. 24. In how many cases can the insured refuse to accept the insured amount? A) 5. B) 2. C) 4. D) 6. Show Answer Correct Answer: C) 4. 25. Negotiation activities are necessary if: A) Involves large risks and costs. B) Limited/few suppliers. C) Long-term cooperation is needed. D) A, B and C are correct. Show Answer Correct Answer: D) A, B and C are correct. 26. Which country are not a member of WTO? A) Macao. B) China. C) Taiwan. D) North Korea. Show Answer Correct Answer: D) North Korea. 27. What are multinational corporations (MNCs)? A) Businesses that operate and trade in more than one country. B) Businesses that operate and trade in a specific region. C) Businesses that operate and trade in a specific industry. D) Businesses that operate and trade in only one country. Show Answer Correct Answer: A) Businesses that operate and trade in more than one country. 28. Government policies that restrict trade A) Trade Barriers. B) Trade fails. C) Trade surplus. D) Free Trade. Show Answer Correct Answer: A) Trade Barriers. 29. What does the acronym APEC stand for? A) Asia-Pacific Economic Cooperation. B) Asia-Pacific Economic Consumption. C) Asia-Pacific Economic Collaboration. D) Asia-Pacific Economic Organization. Show Answer Correct Answer: A) Asia-Pacific Economic Cooperation. 30. The following are valid reasons for state's interference in international trade except A) Protection of domestic industries. B) Infant-industry argument. C) Revenues. D) Protection of national prestige. Show Answer Correct Answer: D) Protection of national prestige. ← 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