This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 51 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 51 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What type of trade barrier is a total ban on products A) Quota. B) Embargo. C) Tariff. D) Subsidy. Show Answer Correct Answer: B) Embargo. 2. The two country, multi-good model differs from the two country, two product model in that in the former A) The relative wage ratio will determine the pattern of trade (which good is exported by which country). B) One cannot determine which country will export which product given only labor productivity data. C) Full specialization is less likely to hold in equilibrium. D) All of the above. Show Answer Correct Answer: D) All of the above. 3. What are some positive effects of Globalisation? A) Increased freedom to travel and immigrate, better access to medicine, information, and technology. B) Lower prices for developed countries and low paying jobs in underdeveloped countries. C) Less pollution in the world. D) All of the above. Show Answer Correct Answer: A) Increased freedom to travel and immigrate, better access to medicine, information, and technology. 4. A shorter form of the word usually composed from the first letter of several words is a /n A) Abbreviation. B) Alliance. C) Organization. D) None of above. Show Answer Correct Answer: A) Abbreviation. 5. When a country can produce a product at a lower opportunity cost than another country A) Absolute advantage. B) Comparative advantage. Show Answer Correct Answer: B) Comparative advantage. 6. Joy gives 2 haircuts and 1 perm. Susie gives 3 haircuts and 2 perms. Who has the absolute advantage for haircuts? A) Joy. B) Susie. Show Answer Correct Answer: B) Susie. 7. In country A, it takes 10 labor hours to produce cloth and 20 labor hours to produce grain. In country B, it takes 20 labor hours to produce cloth and 10 labor hours to produce grain. Which country should produce grain? A) Country A. B) Both A and B should produce grain. C) Country B. D) No country should produce grain. Show Answer Correct Answer: A) Country A. 8. How does a trade deficit impact a country's economy? A) A trade deficit only affects the global economy, not the country's economy. B) A trade deficit can have negative effects on a country's economy. C) A trade deficit has no impact on a country's economy. D) A trade deficit can have positive effects on a country's economy. Show Answer Correct Answer: B) A trade deficit can have negative effects on a country's economy. 9. GATT stands for: A) General Association on Tariffs and Trade. B) General Assembly on Tariffs and Trade. C) General Aggregate on Tariffs and Trade. D) General Agreement on Tariffs and Trade. Show Answer Correct Answer: D) General Agreement on Tariffs and Trade. 10. ..... postulates that, other things equal, the larger (and the more equal in size) and the closer the two countries are, the larger the volume of trade between them is expected to be. A) The gravity model. B) The H-O model. C) The Ricardian model. D) The Standard Trade Model. Show Answer Correct Answer: A) The gravity model. 11. Why should countries trade? A) To keep them busy. B) To help them thrive. C) To increase output. D) To decrease output. Show Answer Correct Answer: B) To help them thrive. 12. China produces products X and Y more efficiently than Ireland. China produces X 4 times & Y 6 times more efficiently than Ireland A) China should produce both. B) China should produce X. C) China should produce Y. D) Ireland should not trade with China. Show Answer Correct Answer: C) China should produce Y. 13. Involves the exchange of goods and services between nations. A) International trade. B) International diplomacy. C) Trade barriers. D) None of above. Show Answer Correct Answer: A) International trade. 14. The dispute resolution forum at the WTO is called..... A) Dispute Solving Body. B) Dispute Settlement Committee. C) Dispute Solution Body. D) Dispute Settlement Body. Show Answer Correct Answer: D) Dispute Settlement Body. 15. What are the factors that have contributed to the globalisation of technology companies? A) Transportation costs-reducedRemoval of barriers to tradeImproved communication systems. B) Improved research and development. C) Improved human resources. D) Improved finance. Show Answer Correct Answer: A) Transportation costs-reducedRemoval of barriers to tradeImproved communication systems. 16. Which of the following accurately reflects the pattern of the U.S. current account balance during the periods:1991; the late 1990s through to the mid-2000s; and 2009 following the onset of recession? A) Larger deficit; tiny surplus; surplus declined. B) Tiny surplus; larger deficit; deficit declined. C) Surplus declined; larger deficit; tiny surplus. D) Larger deficit; surplus declined; tiny deficit. Show Answer Correct Answer: B) Tiny surplus; larger deficit; deficit declined. 17. The Marrakesh Agreement consists of..... A) Annex 1, Annex 2, Annex 3, Annex 4. B) Annex 1, Annex 2, Annex 4, dan Plurilateral Trade Agreements. C) Annex 1, Annex 2, Annex 3, Annex 4, Annex 5. D) Annex 1, Annex 2, Annex 3. Show Answer Correct Answer: A) Annex 1, Annex 2, Annex 3, Annex 4. 18. A country's policy that limits goods entering a country is called..... A) Import quota. B) Protection. Show Answer Correct Answer: A) Import quota. 19. What is the meaning of INCOTERMS? A) International sales contract. B) Terms and conditions for international delivery of goods. C) Payment terms. D) Goods delivery contract between exporter and importer. Show Answer Correct Answer: B) Terms and conditions for international delivery of goods. 20. The international trade between ..... is like a vast game of beggar my neighbour. A) Exports and Imports. B) Two Countries. C) Two world wars. D) Country's allies and enemies. Show Answer Correct Answer: C) Two world wars. 21. What is a definition of Multinational Companies? A) A multinational companies is a company that has a business operations only one country. B) A Multinational Companies is a company that has a business operations in two or more countries. Show Answer Correct Answer: B) A Multinational Companies is a company that has a business operations in two or more countries. 22. What did the General Agreement on Tariffs and Trade (GATT) aim to do? A) Expand the definition of trade to include services. B) Address the unique circumstances of developing countries. C) Create rules governing intellectual property. D) Lower trade barriers like tariffs and create rules for free trade. Show Answer Correct Answer: D) Lower trade barriers like tariffs and create rules for free trade. 23. Gains from trade ALWAYS exist when A) One trading partner has an absolute advantage. B) Neither trading partner has an absolute advantage. C) One trading partner has more capacity than the other. D) The two trading partners have identical production possibility frontiers. E) The two trading partners have different comparative advantages. Show Answer Correct Answer: E) The two trading partners have different comparative advantages. 24. A policy of high barriers to trade. A) Barriers to trade. B) Protectionism. C) Exchange rate. D) Subsidies. Show Answer Correct Answer: B) Protectionism. 25. Factors that affect foreign exchange rates, except ..... A) Government Policy. B) Inflation. C) Interest rate. D) Investment. Show Answer Correct Answer: D) Investment. 26. ..... are taxes on imported goods and raise the price of imported goods above the world price. A) Import Quotas. B) Tariffs. Show Answer Correct Answer: B) Tariffs. 27. Which is true about the relation between inflation and trade balance? A) Lower inflation would impact exports, thus affecting the trade balance. B) Inflation will lead to a weakening of competitiveness and ultimately lead to a decline in exports. C) The increase in the current account surplus can be a result of an increase in imports which leads to imported inflation. D) Increase in money supply in the market increases the purchasing power of money, reducing general price in the market. Show Answer Correct Answer: B) Inflation will lead to a weakening of competitiveness and ultimately lead to a decline in exports. 28. Why do countries impose tariffs on imported goods? A) To promote international cooperation and goodwill. B) To protect domestic industries, reduce trade deficits, and generate revenue for the government. C) To increase the cost of living for citizens. D) To encourage foreign investment in domestic industries. Show Answer Correct Answer: B) To protect domestic industries, reduce trade deficits, and generate revenue for the government. 29. Tariffs are very important in international trade as a catalyst for the development of national profits and traders. A) No. B) Yes. Show Answer Correct Answer: B) Yes. 30. Export-biased growth in Home will A) Trigger anti-bias regulations of the WTO. B) Worsen the terms of trade of Foreign (the trade partner). C) Improve the terms of trade of Home. D) Improve the terms of trade of Foreign. Show Answer Correct Answer: C) Improve the terms of trade of Home. ← 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