Bus Economics solved MCQs

1. International trade increases the welfare of ________________

a. only developed countries

B. only exporting countries

c. all participating countries

d. only importing countries

2. Ricardian theory assumes that labour is ________________ within the country.

a. inefficient

B. heterogeneous

c. homogeneous

d. sufficient

3. Income terms of trade indicate increased capacity to ________________.

a. export

B. import

c. profit

d. investment

4. An offer curve differs from ________________.

a. usual demand curve

B. usual supply curve

c. indifference curve

d. usual demand and supply curve

5. Utility terms of trade was introduced by ________________.

a. jacob viner

B. frank taussig

c. j. s. mill

d. adam smith

6. When supply of exports is elastic, a country will have ________________ terms of trade.

a. unfavorable

B. favorable

c. income

d. different

7. Hecksher-Ohlin theory states that the relative factor prices in two countries are determined by ________________.

a. labour efficiency

B. capital efficiency

c. technological developments

d. differences in factor endowments

8. ________________ is not an objective of commercial trade policy.

a. to determine the rate of interest

B. to protect domestic industries from foreign competition

c. to preserve foreign exchange reserves

d. to maintain favorable balance of payments

9. Tariff rate quotas are ________________

a. based on the value of the traded commodity only

B. low tariff rate on an initial quantity of import within the quota limit and very high tariff rate on imports above the initial amount

c. based on the quantity or volume of the quantity only

d. combination of tariffs and quotas

10. Which of the following is not a NTB?

a. voluntary export restrictions

B. administrative barriers

c. tariff rate quotas

d. local content requirement

11. A free trade area is a trade bloc where ________________

a. countries agree to have a common unified tariff against non-members

B. countries agree to reduce or eliminate tariff barriers on selected goods imported from other member nations

c. countries agree to reduce or eliminate tariff barriers on all goods imported from other member nations

d. all barriers are eliminated to allow free movement of goods, services, capital and labour

12. The ________________ was signed to create the EU in 1993.

a. treaty of london

B. treaty of maastricht

c. treaty of lisbon

d. treaty of rome

13. ASEAN was formed in ________________

a. 1967

B. 1945

c. 1999

d. 2000

14. ________________ refers to the alliance of multiple countries pursuing common goals.

a. single market

B. multilateralism

c. customs union

d. regionalism

15. WTO was set up on ________________

a. 31st july, 1995

B. 1st january, 2000

c. 1st june, 1985

d. 1st january, 1995

16. In the past several years, India's net invisibles were in ________________

a. surplus

B. deficit

c. balance

d. unbalance

17. Private transfers on India's current account include ________________.

a. local withdrawal from nri rupee deposits

B. foreign currency deposits

c. foreign exchange reserves

d. portfolio investment

18. The highest authority of WTO is ________________.

a. the dispute settlement body

B. the ministerial conference

c. the trade policy review body

d. the general council

19. ________________ is not a direct measures to correct BoP disequilibrium.

a. tariffs

B. devaluation of exchange rate

c. import substitution

d. quotas

20. Portfolio foreign investment is included in ________________ account of BoP.

a. capital

B. trade

c. debit

d. current

21. Forward market in foreign exchange refers to ________________ market.

a. a long run

B. a short run

c. a spot

d. short and long run

22. ________________ is not a detect of flexible exchange rate.

a. speculation

B. structural unemployment

c. stability in international monetary system

d. discourages investments

23. The function of foreign exchange market that helps in clearing international transactions is known as ________________.

a. speculation

B. hedging

c. transfer

d. credit

24. When the demand curve for foreign currency, intersects the supply curve, we get ________________ exchange rate.

a. par

B. discount

c. equilibrium

d. premium

25. ________________ of goods results in demand for foreign currency.

a. sale in inter-national market

B. export

c. sale in domestic market

d. import

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