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PPSC Economics Chapter 5 International Economics MCQs With Answers
Question # 1
The product cycle theory of trade is essentially a
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Static short run trade theory
Dynamic, long run trade theory
Zero sum theory of trade
Negative sum theory of trade
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Question # 2
Wassily Leontief used an input output table in order to test the.
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Richardian theory of comparative advantage
Heckscher Ohlin theory of comparative advantage.
Linder theory of overlapping demand
All of the above
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Question # 3
To stabilize the prices of primary products international commodity agreements have utilized all of the following except.
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Tariff -rate quotas applied to imported goods.
Production and export controls.
Buffer stocks
Multilateral contracts
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Question # 4
According to the Hackscher - Ohlin model the source of comparative advantage is a country's
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Technology
Advertising
Factor endowments
both a and c
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Question # 5
Which exchange rate system does not require monetary reserves for official exchange rate intervention.
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Floating exchange rates
Pegged exchange rates
Managed floating exchange rates
Dual exchange rates
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Question # 6
Tariff levels in advanced countries tend to be ___ tariff levels in developing countries.
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Higher than
Equal to
Lower than
There is no general pattern
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Question # 7
Absolute advantage is determined by
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Actual difference in labor productivity between countries.
Relative difference in labor productivity between countries.
Both a and b
Neither a nor b
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Question # 8
The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different.
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Tastes and preferenes
Expectations of future interest rate levels
Per capita income levels
Labor productivities
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Question # 9
The current account includes
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The value of trade in merchandise
Services
Unilateral transfers
All of the above
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Question # 10
If a nation has an open economy it means that the nation.
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Allows private ownership of capital
Has flexible exchange rates
Has fixed exchange rates
Conducts trade with other countries
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Question # 11
A tax of 18 cents per unit of imported cheese would be an example of a.
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Compound tariff
Effective tariff
Ad valorem tariff
Specific tariff
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Question # 12
A widely used indicator to differentiate developed countries from developing countries is.
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International trade per captia
Real income per capita
Unemployment per capita
Calories per capita
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Question # 13
Debit (-) items in the balance of payments correspond to anything that.
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Involve receipts from foreigners
Involves payments to foreigners
Increase the domestic money supply
Decrease the demand for foreign exchange
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Question # 14
The difference between bid rates and ask rates is called the
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Profit
Arbitrage
Spread
Forward transaction
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Question # 15
Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of.
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Research and development subsides.
Loan guarantees
Low interest rate loans
All of the above
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Question # 16
A nation with a current account deficit will be
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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 # 17
the_____________ analysis considers the ability of domestic and foreign prices to adjust to devaluation in the short run.
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Pass through
Absorption
Adjustment mechanism
currency contract period
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Question # 18
A country that is a net international debtor initially experiences a.
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Larger savings pool available finance domestic spending
Higher interest rate which leads lower domestic investment.
Loss of funds to trading partners overseas
Decrease in tis services exports to other countire.
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Question # 19
International trade is based o the notion that.
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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 # 20
Which of the following organizations primarily provides long term loans to developing countries to help them develop their infrastructure such as schools hospitals and roads.
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World Bank
International Monetary fund
Council on foreign Relations
Organization of petroleum exporting countries
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Question # 21
Nontariff trade barriers could include all of the following except.
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Domestic content laws
Government procurement polices
Health , safety, and environmental standards
Antidumping counter/vialling duties applied to imports.
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