This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 40 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 40 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Why were tariffs created? A) To convince Great Britian to stop impressing U.S. sailors. B) To improve trade between the United States and Great Britian. C) To encourage people in the United States to purchase American made goods. D) To help the cotton trade in the southern states. Show Answer Correct Answer: C) To encourage people in the United States to purchase American made goods. 2. Why might businesses be cautious about giving Credit terms in international trade? A) It is the most common method in international trade. B) It requires no financial commitment from the buyer. C) It can lead to non-payment risk for the seller. D) It is the most expensive option. Show Answer Correct Answer: C) It can lead to non-payment risk for the seller. 3. Give one example of a business that will find it more difficult to prepare budgets when the exchange rate goes up and down a lot A) A business that operates completely inside one country. B) A business that buys components from other countries and sells products in other countries. Show Answer Correct Answer: B) A business that buys components from other countries and sells products in other countries. 4. The currency in which payment for import is made depends upon ..... A) The country from which the goods are shipped. B) The country of origin of goods. C) The arrangement between the buyer and seller. D) The bank which the importer's bank has correspondent relationship. Show Answer Correct Answer: A) The country from which the goods are shipped. 5. If the US had free trade with all countries, A) There would be fewer jobs in exporting industries. B) The US government would go bankrupts because of revenue loss. C) Some workers in formerly protected industries would lose their jobs. D) None of above. Show Answer Correct Answer: C) Some workers in formerly protected industries would lose their jobs. 6. The followings are true about Mercantilism EXCEPT: A) It believes that national prosperity is the result of a positive balance of trade. B) The mercantilist government see import as good and export as bad. C) It lead to a situation of zero sum game for some nations. D) Mercantilist countries colonized other countries to gain resources and market finished goods. Show Answer Correct Answer: B) The mercantilist government see import as good and export as bad. 7. Explain the concept of the foreign exchange market. A) The foreign exchange market is a market where only stocks and bonds are traded. B) The foreign exchange market is a physical location where currencies are exchanged. C) The foreign exchange market is a government-regulated market where currencies are traded. D) The foreign exchange market is a decentralized global market where currencies are traded. Show Answer Correct Answer: D) The foreign exchange market is a decentralized global market where currencies are traded. 8. "carrier" is the same as "shipper" A) False. B) True. Show Answer Correct Answer: A) False. 9. Setting a limit on the quantity of a product that may be imported or exported within a given period to regulate international trade is called? A) Deal. B) Quota. C) Embargo. D) Tariff. Show Answer Correct Answer: B) Quota. 10. International trade offers the following benefits to the nation: A) Earnings of foreign exchange. B) More efficient use of resources. C) Improving growth prospects and employment potentials. D) All of the Above. Show Answer Correct Answer: D) All of the Above. 11. The Balance of Trade is the difference between ..... A) Visible exports and invisible imports. B) Invisible exports and visible imports. C) Visible exports and visible imports. D) None of above. Show Answer Correct Answer: C) Visible exports and visible imports. 12. What is dumping? A) Selling goods in a foreign market at a higher price than in the domestic market. B) Selling goods in a foreign market at their fair market value. C) Selling goods in a foreign market below their cost of production. D) Selling goods in a foreign market with the goal of driving indigenous competitors out. Show Answer Correct Answer: C) Selling goods in a foreign market below their cost of production. 13. What is the balance of trade in the United States? A) A surplus in both goods and services and foreign investments. B) A deficit in both goods and services and foreign investments. C) A surplus in foreign investments but a deficit in goods and services. D) A surplus in goods and services but a deficit in foreign investments. Show Answer Correct Answer: B) A deficit in both goods and services and foreign investments. 14. Which of the following accurately defines a tariff? A) A special tax placed on foreign goods sold in the U.S. B) A method used to stop the shipment of certain products to or from particular countries. C) A packing and shipping regulation for hazardous products. D) A fixed limit on the amount of import or export of a product. Show Answer Correct Answer: A) A special tax placed on foreign goods sold in the U.S. 15. A limit on either the quantity or the monetary value of a product that may be imported. A) Free trade. B) Quota. C) Joint venture. D) Imports. Show Answer Correct Answer: B) Quota. 16. Three most common forms of Protectionism? A) Tariff, Subsidies, Quotas. B) Tariff, Subsidies, Non-tariff barriers. C) Quotas, Subsidies, Non-tariff barriers. D) Tariffs, Quotas, Non-tariff barriers. Show Answer Correct Answer: A) Tariff, Subsidies, Quotas. 17. In which of the following, the firms do not have much contact with the foreign markets? A) Joint venture. B) Wholly owned subsidiary. C) Export / import. D) None of these. Show Answer Correct Answer: C) Export / import. 18. Definition of Make compromises A) Careful about what you say so that you don't upset or embarrass anyone. B) Let the other person have something in order to achieve an agreement. C) Pretend something in order to achieve what you want. D) Accept less than what you originally wanted in order to reach an agreement. Show Answer Correct Answer: D) Accept less than what you originally wanted in order to reach an agreement. 19. How do international trade fairs and exhibitions contribute to the global economy? A) International trade fairs and exhibitions contribute to the global economy by facilitating international business transactions, promoting economic growth, and fostering innovation and collaboration among global businesses. B) International trade fairs and exhibitions only benefit local businesses. C) International trade fairs and exhibitions have no impact on the global economy. D) International trade fairs and exhibitions lead to economic decline. Show Answer Correct Answer: A) International trade fairs and exhibitions contribute to the global economy by facilitating international business transactions, promoting economic growth, and fostering innovation and collaboration among global businesses. 20. To sell readymade garments for children, men, women, etc is the example of A) Single product shop. B) Single line shop. C) Departmental store. D) General store. Show Answer Correct Answer: B) Single line shop. 21. Heckscher-Ohlin Theory advocated government intervention by recommending policies to maximize exports and minimize imports. A) True. B) False. Show Answer Correct Answer: B) False. 22. Which factor would cause a country's exchange rate to fall? A demand for imports increase B domestic interest rates rise C domestic savings increase D more tourists visit the country A) C. B) D. C) B. D) A. Show Answer Correct Answer: D) A. 23. Methods used by a business to for finance International Trade include ..... A) Letter of credit. B) Personal cheques. C) Cash. D) Credit card. Show Answer Correct Answer: A) Letter of credit. 24. Which of the following is TRUE about the Risk of fake transfers and commercial fraud due to investment diversion? A) The slowdown in the global economy. B) Limit economic growth. C) Affecting the psychology of consumers. D) All of above. E) None of above. Show Answer Correct Answer: A) The slowdown in the global economy. 25. T or F:International trade did not improve the economy A) True. B) False. Show Answer Correct Answer: B) False. 26. If the government imposes a tariff on imports of cheese, the price and quantity of imported cheese will most likely change in which of the following ways? A) Price:Decrease, Quantity:Increase. B) Price:Increase, Quantity:Not change. C) Price:Increase, Quantity:Increase. D) Price:Decrease, Quantity:Decrease. E) Price:Increase, Quantity:Decrease. Show Answer Correct Answer: E) Price:Increase, Quantity:Decrease. 27. Hiring a foreign manufacturer to make your products according to your specifications. A) Joint venture. B) Contract manufacturing. C) Infrastructure. D) Mini-national. Show Answer Correct Answer: B) Contract manufacturing. 28. Mercantilism, generally shares with ..... the belief that each state must protect its own interests at the expense of others A) Realism. B) Idealism. C) Liberalism. D) None of above. Show Answer Correct Answer: A) Realism. 29. Is when a person, country, or region works on making one part of an item or a specific good. A) Specialization. B) Trade. C) Export. D) Import. Show Answer Correct Answer: A) Specialization. 30. "Retaliatory action" taken by a WTO member country due to experiencing losses due to the rules or policies of another WTO member country is called..... A) Compensation. B) Infiltration. C) Retaliation. D) Retribution. Show Answer Correct Answer: C) Retaliation. ← 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