This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 28 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tariffs A) B. B) C. C) D. D) A. Show Answer Correct Answer: D) A. 2. A nation will gain if: A) Exports decrease and imports increase. B) Both exports and imports increase. C) Exports increase and imports decrease. D) Both exports and imports decrease. Show Answer Correct Answer: C) Exports increase and imports decrease. 3. Who has established official abbreviations for all currencies, which are now commonly used? A) International Organization for Standardization (ISO). B) Incoterms (International Commercial Terms). C) International Chamber of Commerce (ICC). D) International Monetary Fund (IMF). Show Answer Correct Answer: A) International Organization for Standardization (ISO). 4. Which of the following transactions would increase the current account surplus in Japan's balance of payments accounts? A) A Japan-based company buys a piece of equipment from Germany. B) Leah, a French citizen, works at a Japanese company in Paris. C) Marta, a Japanese investor, buys stocks in a Japanese company. D) A Japan-based company sells automobiles to Canada. E) Dana, a Canadian, buys stocks in a Japanese company. Show Answer Correct Answer: D) A Japan-based company sells automobiles to Canada. 5. What is the foreign exchange rate? A) The price of goods and services in different countries. B) The price of stocks and bonds in different currencies. C) The price of gold in different currencies. D) The price of a currency in the currencies of other nations. Show Answer Correct Answer: D) The price of a currency in the currencies of other nations. 6. Four attributes consisting Porter's Diamond, except: A) Demand conditions. B) Supply conditions. C) Factor endowments. D) None of above. Show Answer Correct Answer: B) Supply conditions. 7. What is meaning about absolute advantage? A) The ability of a country to produce certain types of goods at a lower cost than other countries because of differences in efficiency. B) The ability of a country to produce other types of goods at a lower cost than other countries because of differences in efficiency. C) The willingness of the state to produce other goods whose costs are lower than the costs incurred by other countries . D) The desire of the state to produce certain goods that are desperately needed by citizens. Show Answer Correct Answer: A) The ability of a country to produce certain types of goods at a lower cost than other countries because of differences in efficiency. 8. ..... is the development of industries in a country or region on a wide scale. A) Industrialization. B) Stabilization. C) Exchange rate. D) Protectionist policy. Show Answer Correct Answer: A) Industrialization. 9. The seller must deliver the goods and pay the costs at their own factory. Until the goods are placed on the side of the ship at the port of origin as specified with the buyer, which form is INCOTERM? A) FAS. B) FOB. C) DDP. D) CPT. Show Answer Correct Answer: A) FAS. 10. Preferential Trade Agreement is just the need for goods to trade only compared to the tariff setting for member countries, do you agree? A) No. B) Yes. Show Answer Correct Answer: A) No. 11. Comparative advantage is used to explain the relationship between specialization and international trade. A) False. B) True. Show Answer Correct Answer: B) True. 12. Here are the effects on import quota except A) Increased inefficiency in production. B) Domestic consumers are worse off. C) Domestic producers are better off. D) Domestic income distribution worsens. E) The government either gains or loses. Show Answer Correct Answer: E) The government either gains or loses. 13. The theory of ..... maintains that a country's wealth is measured by its holdings of gold and silver. A) Comparative advantage. B) Neomercantilism. C) Competitive advantage. D) Mercantilism. Show Answer Correct Answer: D) Mercantilism. 14. Assume the United States has an absolute advantage over Singapore in the production of all goods. Which statement about trade possibilities between the two countries is correct? A) The terms of trade will be based on the United States absolute advantage. B) They can still arrange a beneficial trade if each one focuses production on a good in which they have a comparative advantage. C) Since the United States has an absolute advantage in all goods, it is impossible to reach a trade agreement. D) Singapore could benefit from a trade with the United States, but the United States would not benefit. Show Answer Correct Answer: B) They can still arrange a beneficial trade if each one focuses production on a good in which they have a comparative advantage. 15. Which cannot measure economic globalization A) Technology development. B) Movement of goods and service. C) Increased employment. D) National trade. E) Movement of capital as direct investment. Show Answer Correct Answer: D) National trade. 16. When Chile decided to ban the import of all apples coming into their country from the United States, this is an example of which trade barrier? A) Embargo. B) Quota. C) Health and Safety Standard. D) Subsidy. Show Answer Correct Answer: A) Embargo. 17. Trade Policy is formed to protect and promote locally produced goods. A) Yes. B) No. Show Answer Correct Answer: A) Yes. 18. What action would the Federal Reserve take to control inflation? A) Buy government securities. B) Decrease the required reserve ratio. C) Increase the discount rate. D) Increase taxes. Show Answer Correct Answer: C) Increase the discount rate. 19. Which is not related to international trade? A) Tran Sea Transport Company transports goods of Samui Hotel Company from Khanom Pier to their hotel. B) Mrs. B claims an exemption from liability under the Carriage of Goods by Sea Act against Company A in order to limit her liability from her causing damage to the goods during the delay in transporting the goods. C) Mr. Xi agreed to purchase goods from China with DAP delivery conditions. D) Mr. A agrees to sell pork and basil fried rice to Mr. C in the Chor Pradu food center. Show Answer Correct Answer: D) Mr. A agrees to sell pork and basil fried rice to Mr. C in the Chor Pradu food center. 20. Which factor is the basis for the theory of comparative advantage? A) Rationing. B) Investment. C) Specialization. D) Capital. Show Answer Correct Answer: C) Specialization. 21. The French government gives french wheat farmers money for every acre of wheat that they grow. Which type of trade barrier is this? A) Embargo. B) Tax. C) Tariff. D) Subsidy. Show Answer Correct Answer: D) Subsidy. 22. Which one of the following is an embargo? A) When a tax is placed on an imported good to offset an illegal practice. B) When a prohibition of trade is enacted. C) When a number limit is placed on an imported good. D) A way of raising revenue for the government. Show Answer Correct Answer: B) When a prohibition of trade is enacted. 23. What is the primary purpose of the European Union (EU) in the context of international integration? A) To serve as a military alliance. B) To facilitate political and economic integration in Europe. C) To promote environmental conservation. D) To establish a global currency. Show Answer Correct Answer: B) To facilitate political and economic integration in Europe. 24. Which policy would best enable a government to encourage greater specialisation in the use of its country's resources? A encouraging diversification in industry B protecting small businesses C reducing tariffs on imports into its country D subsidising job creation in rural areas A) D. B) A. C) B. D) C. Show Answer Correct Answer: D) C. 25. One of the following trade blocs is NOT composed of Latin American countries: A) EFTA. B) OPEC. C) NAFTA. D) MERCOSUR. Show Answer Correct Answer: A) EFTA. 26. Which statement is not a valid reason why a country may impose protectionist measures? A to allow a newly developed domestic industry to grow to a viable size B to enable a country to retain control of an industry it regards as being of strategic importance C to give consumers a wider choice of goods and services D to give time for workers in a declining domestic industry to find alternative employment A) D. B) B. C) A. D) C. Show Answer Correct Answer: D) C. 27. Japan now produces over half of the wrist watches available for sale in the United States. Suppose the United States government places a quota on foreign watches. Which of the following would result from change in quota on wrist watches. A) The price of watches will be unchanged. B) The price of watches will decrease. C) The price of watches will increase. D) The prices of watches will be eliminated. Show Answer Correct Answer: C) The price of watches will increase. 28. Factors driving international trade A) Politics. B) Cultural Differences. C) Protection. D) Quota. Show Answer Correct Answer: B) Cultural Differences. 29. It means the price includes the cost of goods and transport charges to the destination port. A) INCOTERMS-FREE ON BOARD. B) EXW (EX WORKS). C) INCOTERMS-COST & FREIGHT (CFR). D) None of above. Show Answer Correct Answer: C) INCOTERMS-COST & FREIGHT (CFR). 30. The US imposed tariffs on cars and motorcycles from Germany. What is the effect of these tariffs? A decrease in inflation in the US B decrease in trade between the US and Germany C increase in profits of car and motorcycle producers from Germany D increase in standards of living in the US and in Germany A) C. B) B. C) A. D) D. Show Answer Correct Answer: B) B. ← 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