This quiz works best with JavaScript enabled. Home > Finance > Economics > International Economics > International Trade > International Trade – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Trade Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A farmer can grow wheat or corn. She grows corn because it will make more money than wheat. The value of the wheat crop she chose not to grow could best be described as ..... A) A comparative advantage. B) A comparative disadvantage. C) An opportunity cost. D) All of the above. Show Answer Correct Answer: D) All of the above. 2. Limit on the amount of a product that can be imported A) Quota. B) Shipment. C) Specialization. D) None of above. Show Answer Correct Answer: A) Quota. 3. If you trade one item or service for another. What are you giving an example of? A) The Exchange System. B) The Barter System. C) The Trade System. D) None of above. Show Answer Correct Answer: B) The Barter System. 4. The purpose of the founding of the European Union (E.U.) in 1993 was to do which of the following? A) Fight the growing global network of terrorism. B) Guarantee the freedom of movement of people, goods, services and capital. C) Become an economic power to compete with the Unites States. D) Prevent the poor from causing a revolution. Show Answer Correct Answer: B) Guarantee the freedom of movement of people, goods, services and capital. 5. Intra-industry trade will tend to dominate trade flows when which of the following exists? A) Large differences between relative country factor availabilities. B) Small differences between relative country factor availabilities. C) Homogeneous products that cannot be differentiated. D) Constant cost industries. Show Answer Correct Answer: B) Small differences between relative country factor availabilities. 6. Who has the comparative advantage in Clothing? A) Gamma. B) Neither. C) Omega. D) Both. Show Answer Correct Answer: A) Gamma. 7. Australia's largest trading partner is: A) USA. B) Japan. C) China. D) New Zealand. Show Answer Correct Answer: C) China. 8. A persistent trade deficit causes A) Lower prices on imported goods. B) Unemployment to increase in import industries. C) Unemployment to increase in export industries. D) The dollar to grow stronger. Show Answer Correct Answer: B) Unemployment to increase in import industries. 9. The Marhsall Lerner Condition is designed to answer which question? A) Is a depreciation good or bad?. B) Will the current account improve following a depreciation?. C) Will a currency depreciate?. D) How long will the coronavirus epidemic last?. Show Answer Correct Answer: B) Will the current account improve following a depreciation?. 10. Government payment to a domestic producer to encourage or protect a certain economic activity A) Tariff. B) Standard/regulation. C) Subsidy. D) Quota. Show Answer Correct Answer: C) Subsidy. 11. Advances in technology have increased the number of people needed to ..... A) Work in assembly lines. B) Teach children in schools. C) Develop computer software. D) Serve in the military. Show Answer Correct Answer: C) Develop computer software. 12. Trade is needed because A) We have to trade because it's the law. B) It's fun to trade with friends. C) People want or need things they cannot get in their own country. D) None of above. Show Answer Correct Answer: C) People want or need things they cannot get in their own country. 13. Which of the following is not a benefit of int. trade? A) Lower domestic prices. B) Development of more efficient methods and new products. C) A greater range of consumption choices. D) High wage levels for all domestic workers. Show Answer Correct Answer: D) High wage levels for all domestic workers. 14. The assignment arrives at the warehouse on Monday and will be ..... immediately. A) Unsent. B) Unloaded. C) Undone. D) Emptied. Show Answer Correct Answer: D) Emptied. 15. Wheat grown in Iowa is used to make cereal in South America. A) Export. B) Import. Show Answer Correct Answer: A) Export. 16. Irrevocable L/Cs ..... A) Can only be cancelled or amended by the importer. B) Cannot be cancelled or amended without the permission of the exporter. C) Are guarantees to importers to support domestic economies. D) None of above. Show Answer Correct Answer: B) Cannot be cancelled or amended without the permission of the exporter. 17. Australia needs trade with China more than China needs trade with Australia A) False. B) True. Show Answer Correct Answer: B) True. 18. What are trade blocks designed to do? A) Encourage trade between countries within the trading block. B) Impose tariffs on goods and services. C) Limit international trade. D) Promote isolationism in international business. Show Answer Correct Answer: A) Encourage trade between countries within the trading block. 19. Is the market value of all finished goods and services produced within a country in a year. Can be calculated using production, expeditures or incomes. A) GDP nominal. B) Real GDP. C) GDP per capita. D) None of above. Show Answer Correct Answer: A) GDP nominal. 20. Inflation can BEST be described as: A) Fluctuations in the general price level. B) A general and sustained rise in the level of prices. C) A fall in the level of prices of goods and services. D) Changes in the level of prices of goods and services. Show Answer Correct Answer: B) A general and sustained rise in the level of prices. 21. Specialization is a method of production whereby an entity focuses on the production? A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 22. What is the daily dollar amount traded on all stock exchange markets? A) 1.2 billion USD. B) 6.6 billion USD. C) 6.6 trillion USD. D) 1.2 trillion USD. Show Answer Correct Answer: C) 6.6 trillion USD. 23. The Law of Comparative Advantage states A) That some countries are more efficient in the production of all goods. B) That one country is more efficient in the production of all goods. C) That Centrally Planned Economies are better at producing the goods they use and so do not import. D) A country should specialise in the production of those goods at which it is relatively more efficient. Show Answer Correct Answer: D) A country should specialise in the production of those goods at which it is relatively more efficient. 24. It is the program you have the possibility to use when an imported good is broken but you still have the warranty from the supplier abroad: A) Temporary import. B) Maquila. C) Draw back. D) Altex. Show Answer Correct Answer: C) Draw back. 25. What is the aim of protectionism? A) To cushion domestic business and industries from overseas competition. B) To soften domestic firms and market from foreign investment and to prevent results of interplay of the free market power. C) A and B. D) To increase the market demand. Show Answer Correct Answer: C) A and B. 26. When a country imports more than they export, it creates a- A) Trade surplus. B) The trade fails. Show Answer Correct Answer: B) The trade fails. 27. Which unit does a physical inspection on the products? A) Inspectorate Unit. B) Licensing Unit. Show Answer Correct Answer: A) Inspectorate Unit. 28. Commodities that are expensive and gives sense of entitlement and prestige in society. A) Necessities. B) Comforts. C) Luxuries. D) None of above. Show Answer Correct Answer: C) Luxuries. 29. What factors can affect the balance of trade? A) Population size, cultural differences, transportation costs. B) Weather conditions, consumer preferences, technological advancements. C) Currency stability, political stability, labor costs. D) Exchange rates, tariffs and trade barriers, economic growth, inflation, government policies, and global demand for goods and services. Show Answer Correct Answer: D) Exchange rates, tariffs and trade barriers, economic growth, inflation, government policies, and global demand for goods and services. 30. Argentina increased taxes to 9% on the import of milk powder after record levels of imports and fears Argentina farmers would suffer falling incomes. This is an example of which trade barrier? A) Tariff. B) Embargo. C) Quota. D) None of above. Show Answer Correct Answer: A) Tariff. ← 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 8International Trade Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books