This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Firms that establish a first-mover advantage may dominate global trade in that product. A) False. B) True. Show Answer Correct Answer: B) True. 2. International trade takes place because of: A) Governments' desire to protect their industries. B) Differences in price levels in various countries. C) Inequalities in factor endowments between nations. D) Inequalities in the terms of trade. Show Answer Correct Answer: C) Inequalities in factor endowments between nations. 3. An advantage of international trade:Countries can't produce all the things they want or need because resources are unevenly distributed 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. 4. Which is NOT a challenge of multinational companies A) Economy. B) Sociocultural. C) Management control. D) Politics. Show Answer Correct Answer: D) Politics. 5. Foreign exchange market is necessary in international trade because A) Each country has its own monetary system. B) The United States went off the gold standard. C) International trade is conducted in foreign markets. D) It prevents a devaluation of the currency. Show Answer Correct Answer: A) Each country has its own monetary system. 6. Elijah's family exports tea, Hannah's family sells candles, and Benjamin's family trades crafts. Which is an example of international trade? A) Elijah's family exporting tea to other countries. B) Hannah's family selling homemade candles within their country. C) Benjamin's family trading homemade crafts with their neighbors. D) The exchange of goods and services within a company. Show Answer Correct Answer: A) Elijah's family exporting tea to other countries. 7. What is a synonym for "goods" ? A) Welfare. B) Possessions. C) Merchandise. D) None of above. Show Answer Correct Answer: C) Merchandise. 8. Counter purchase denotes a whole range of barter like agreements; its principle is to trade goods and services for other goods and services when they cannot be traded for money. A) True. B) False. Show Answer Correct Answer: B) False. 9. What would not be included in the current account of the balance of payments? A) Dividends earned from a firm in another country. B) Imports of TVs from another country. C) Purchase of a house in another country. D) Rents paid to owners of land in another country. Show Answer Correct Answer: C) Purchase of a house in another country. 10. In the US, we freely choose how we are to spend our money. Choices consumers determine which products succeed or fail in the marketplace. Is known as what? A) Freedom of Enterprise. B) Freedom of Choice. C) Freedom of Individualism. D) None of above. Show Answer Correct Answer: B) Freedom of Choice. 11. Different countries produce various goods and services inefficiently than others when they have an absolute advantage. A) False. B) True. Show Answer Correct Answer: A) False. 12. The aim of WTO is A) Money transfer from developed to developing countries. B) Liberalization of international trade. C) Free movements of travelers. D) Globalization of transport. Show Answer Correct Answer: B) Liberalization of international trade. 13. What document can be used as a document of title in international trade? A) A Bill of lading. B) D Documentary credit. C) C Certificate of origin. D) B Bill of exchange. Show Answer Correct Answer: A) A Bill of lading. 14. Which of the following cannot be traded internationally? A) Auto Repair. B) Cement. C) Sand. D) None. Show Answer Correct Answer: A) Auto Repair. 15. Ethical strategy are the accepted principles of right or wrong governing the conduct of business people. A) True. B) False. Show Answer Correct Answer: B) False. 16. Limit of the amount (quantity) of a good that can be imported is called a(n): A) Exports. B) Quota. C) Appreciation. D) Subsidy. Show Answer Correct Answer: B) Quota. 17. U. S. has absolute advantage over Guam in all goods. Which trade possibility is true? A) The terms of trade will be based on the United States' absolute advantage. B) Since U.S. has absolute advantage in all goods, it's unwise to trade. C) They will trade if each focuses on a good which they have comparative advantage. D) Guam could benefit from a trade with the U.S. but the US would not benefit. Show Answer Correct Answer: C) They will trade if each focuses on a good which they have comparative advantage. 18. Selling goods to another countries is an A) Import. B) Export. Show Answer Correct Answer: B) Export. 19. The commodities exported from India to other countries include ..... A) Petroleum crude and products. B) Base metals, electronic items, machinery, gems and jewelry, chemicals and related products. C) Agricultural products. D) Gems and jewelry, chemicals and related products, agriculture and allied products,. Show Answer Correct Answer: D) Gems and jewelry, chemicals and related products, agriculture and allied products,. 20. According to the principle of comparative advantage, on what does a country's gains from international trade depend? A) Its lower opportunity cost in the production of some goods compared to its trading partners. B) Its greater productive capacity in some goods compared to its trading partners. C) Its level of money wage rates compared to its trading partners. D) It imposing a higher level of tariffs compared to those of its trading partners. Show Answer Correct Answer: A) Its lower opportunity cost in the production of some goods compared to its trading partners. 21. It is when the country exports more goods and services than the export A) Trade Deficit. B) Trading. C) Trade explicit. D) Trading balance. Show Answer Correct Answer: A) Trade Deficit. 22. Definition of Haggling A) Pretend something in order to achieve what you want. B) Careful about what you say so that you don't upset or embarrass anyone. C) A thing bought or offered for sale much more cheaply than is usual or expected. D) Arguing to agree on the price of something. Show Answer Correct Answer: D) Arguing to agree on the price of something. 23. What is the most likely reason that countries specialize in producing some goods and services and trading for others? A) They can get more goods overall. B) They can produce more of a good than another country can. C) They make some goods more efficiently than other countries do. D) They can protect domestic industries and jobs. Show Answer Correct Answer: A) They can get more goods overall. 24. What is the main purpose of Mexican free trade agreements? A) To promote fair competition. B) To eliminate barriers to trade. C) To increase investment opportunities. D) All of the above. Show Answer Correct Answer: D) All of the above. 25. Which of the following is NOT a responsibility of a Mexican customs broker? A) Facilitating the import and export of goods between Mexico and other countries. B) Ensuring compliance with Mexican customs regulations and requirements. C) Handling customs paperwork and documentation. D) Providing financial services for international trade transactions. Show Answer Correct Answer: D) Providing financial services for international trade transactions. 26. One disadvantage of a fixed exchange rate system is that A) The volatility of the rate is likely to be higher. B) It can lead to current account imbalances. C) Less opportunity for currency speculation. D) Less control over domestic interest rates. Show Answer Correct Answer: D) Less control over domestic interest rates. 27. If the United States dollar appreciates relative to the China Yuen, what is a likely outcome? A) Trade surplus in US. B) Trade deficit in China. C) Trade deficit in both. D) Trade surplus in China. Show Answer Correct Answer: D) Trade surplus in China. 28. Theory of absolute advantage was given by ..... A) Philip Kotler. B) Peter Drucker. C) David Ricardo. D) Adam Smith. Show Answer Correct Answer: D) Adam Smith. 29. A disadvantage of international trade:Trading internationally usually involves higher transport costs 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. 30. Chairs made in China are flown to The Bahamas A) Export. B) Import. Show Answer Correct Answer: B) Import. ← PreviousNext →Related QuizzesInternational Economics QuizzesEconomics QuizzesInternational Trade Quiz 1International Trade Quiz 2International Trade Quiz 3International Trade Quiz 5International Trade Quiz 6International Trade Quiz 7International Trade Quiz 8International Trade Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books