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Online Tests
PPSC Economics Chapter 5 International Economics MCQs With Answers
Question # 1
A tariff can ___________ raise a country's welfare
Choose an answer
Never
Sometimes
always
None of the above
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Question # 2
International trade is based o the notion that.
Choose an answer
Different currencies are an obstacle to international trade
Goods are more mobile internationally than are resources
Resources are more mobile internationally that are goods
A country's exports should always exceeds its imports
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Question # 3
A nation with a current account deficit will be
Choose an answer
Lending more money to other nations
Experiencing a surplus in exports of goods and services
Reducing its indebtedness to other nations
Going further into debt with other nations
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Question # 4
A primary reason why nations conduct international trade is because.
Choose an answer
some nations prefer to produce one thing while others produce another.
Resources are not equally distributed to all trading nations
Trade enhances opportunities to accumulate profits
Interest rates are not identical in all trading nations
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Question # 5
Exchange rate overshooting often occur because.
Choose an answer
Domestic prices adjust slowly to shifts in demand
Military spending increases during military's confects
Elasticities are smaller in the long run than the short run
Elasticities are smaller in the short run than the long run.
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Question # 6
A widely used indicator to differentiate developed countries from developing countries is.
Choose an answer
International trade per captia
Real income per capita
Unemployment per capita
Calories per capita
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Question # 7
Credit (+) items in the balance of payments correspond to anything that.
Choose an answer
Involves receipts from foreigners
Involves payments to foreigners
Increases the domestic money supply
Decrease the demand for foreign exchange
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Question # 8
The world trade organization is sometimes criticized for all of the following reasons except.
Choose an answer
If reduces the sovereignty of member countries.
Favors free trade over the quality of the environment
It has no way to solve trade disputes among member countries.
It is a "puppet" of multinational corporations
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Question # 9
The most widely traded currency in the foreign exchange market is the.
Choose an answer
Euro
Chinses yuan
British pound
U.S. Dollar
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Question # 10
The institutional framework developed in 1974 to promote trade liberalization is known as.
Choose an answer
WTO
GATT
IMF
World bank
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Question # 11
In balance of payments accounting tourism and travel are classified in the
Choose an answer
Merchandise trade account
Services account
Unilateral transfers account
Capital account
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Question # 12
If a country has a bowed out production possibility frontier then production is said to be subject to.
Choose an answer
Constant opportunity costs
Decreasing opportunity costs
First increasing and than decreasing opportunity costs
Increasing opportunity costs
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Question # 13
A product will be traded only if the pre trade price difference between the two countries
Choose an answer
Is less than the cost of transporting it between them
is greater than the cost of transporting it between them
Equals the cost of transporting it between them
More information is needed to answer this question
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Question # 14
Multinational corporations
Choose an answer
Always produce primary goods
Always produce manufactured goods
Products primary goods or manufactured goods
None of the above
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Question # 15
Ad valorem tariffs are collected as.
Choose an answer
A percentage of the price of the product
A percentage of the quantity of imports
All of the above
Fixed amounts of money per unit traded
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Question # 16
If import licenses are auctioned off to domestic importers in a competitive market their scarcity value accurse to.
Choose an answer
Foreign corporations
Foreign workers
Domestic corporations
The domestic government
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Question # 17
Intra industry trade therory.
Choose an answer
Explains why the United States might export autos and import clothing
Explains why the united states might export and import differentiated versions of the same product such as different type of autos.
Assumes that transport costs are very low or do not exist
Ignores seasonal considerations for agricultural goods
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Question # 18
Anti dumping duties applied to imported goods.
Choose an answer
Are abolished by the world Trade Organization
Result in decreases in consumer surplus for domestic households
Are imposed by industrial countries but not developing countries.
Result in lower priced goods for domestic consumers
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Question # 19
Nontariff trade barriers could include all of the following except.
Choose an answer
Domestic content laws
Government procurement polices
Health , safety, and environmental standards
Antidumping counter/vialling duties applied to imports.
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Question # 20
If the international terms of trade settle at a level that is between each country's opportunity cost.
Choose an answer
There is no basis for gainful trade for either country
Both countries gain from trade
Only one country gains from trade
One country gains and the other country loses from trade
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