| 1. |
If a nation has an open economy it means that the nation: |
| A. | Allows private ownership of capital |
| B. | Has flexible exchange rates |
| C. | Has fixed exchange rates |
| D. | Conducts trade with other countries |
| Answer» D. Conducts trade with other countries | |
| 2. |
The term Euro Currency market refers to |
| A. | The international foreign exchange market |
| B. | The market where the borrowing and lending of currencies take place outside the country of issue |
| C. | The countries which have adopted Euro as their currency |
| D. | The market in which Euro is exchanged for other currencies |
| Answer» B. The market where the borrowing and lending of currencies take place outside the country of issue | |
| 3. |
Dumping refers to: |
| A. | Reducing tariffs |
| B. | Sale of goods abroad at low a price, below their cost and price in home market |
| C. | Buying goods at low prices abroad and selling at higher prices locally |
| D. | Expensive goods selling for low prices |
| Answer» B. Sale of goods abroad at low a price, below their cost and price in home market | |
| 4. |
International trade and domestic trade differ because of: |
| A. | Different government policies |
| B. | Immobility of factors |
| C. | Trade restrictions |
| D. | All of the above |
| Answer» D. All of the above | |
| 5. |
Market in which currencies buy and sell and their prices settle on is called the |
| A. | International bond market |
| B. | International capital market |
| C. | Foreign exchange market |
| D. | Eurocurrency market |
| Answer» C. Foreign exchange market | |
| 6. |
Which one is not associated with the UNO |
| A. | ILO |
| B. | WHO |
| C. | ASEN |
| D. | All of the above |
| Answer» C. ASEN | |
| 7. |
International Labor Organization is agency of |
| A. | IBRD |
| B. | UN Security Council |
| C. | International Fund for Agricultural |
| D. | United Nations |
| Answer» D. United Nations | |
| 8. |
Headquarter of International Labor organization is located in |
| A. | Geneva |
| B. | Rome |
| C. | France |
| D. | Tokyo |
| Answer» A. Geneva | |
| 9. |
General Agreement on Tariffs and Trade (GATT) went into effect? |
| A. | 1945 |
| B. | 1948 |
| C. | 1946 |
| D. | 1947 |
| Answer» B. 1948 | |
| 10. |
Which of the following is the main objective behind the establishment of WTO |
| A. | To settle disputes between nations |
| B. | To widen the principle of free trade to sectors such as services and agriculture |
| C. | To cover more areas than GATT |
| D. | All of them |
| Answer» D. All of them | |
| 11. |
International Labor Organization received nobel Peace Prize in |
| A. | 1965 |
| B. | 1969 |
| C. | 1966 |
| D. | 1975 |
| Answer» B. 1969 | |
| 12. |
" Term of trade " between two countries refer to a ratio of |
| A. | Export prices to import prices |
| B. | Currency Values |
| C. | Export to imports |
| D. | Balance of trade to balance of payments |
| Answer» A. Export prices to import prices | |
| 13. |
When was GATT replaced with WTO? |
| A. | 1994 |
| B. | 1992 |
| C. | 1995 |
| D. | 1993 |
| Answer» C. 1995 | |
| 14. |
WTO comes as the third economic pillar of world-wide dimensions along |
| A. | International Monetary Funds |
| B. | international Economic |
| C. | International Funding Organisation (IFO) |
| D. | International Development Bank (IDB) |
| Answer» A. International Monetary Funds | |
| 15. |
Gold standard means |
| A. | Currency of the country is made of |
| B. | Paper currency is not used |
| C. | Currency of the country is freely convertible |
| D. | (A) and (C) |
| Answer» D. (A) and (C) | |
| 16. |
Underlying the application of the monopolistic competition model to |
| A. | increases market size |
| B. | allows companies to charge higher price |
| C. | increases consumer choices |
| D. | decreases the number of firms in an industry |
| Answer» A. increases market size | |
| 17. |
Which of the following trade policies limits specified quantity of goods to be |
| A. | Quota |
| B. | Import tariff |
| C. | Specific tariff |
| D. | All of the above |
| Answer» A. Quota | |
| 18. |
In the 2-factor, 2 good Heckscher-Ohlin model, the two countries differ in |
| A. | Military capabilities |
| B. | labour productivities |
| C. | relative availabilities of factors of production |
| D. | Taste |
| Answer» C. relative availabilities of factors of production | |
| 19. |
Since 1980s which of the following changes has happened in the world trade? |
| A. | Share of "north-north" trade has decreased in total merchandise exports |
| B. | Share of "south-- south" trade has increased in total merchandise eports |
| C. | share of agriculture produce has decreased in total merchandise exports |
| D. | all of the above |
| Answer» D. all of the above | |
| 20. |
According to Ricardo, a country will have a comparative advantage in: |
| A. | Industries in which there are neither imports nor exports |
| B. | import competiting industrie |
| C. | Industries that sell to domestic and foreign buyers |
| D. | industries that sell to only foreign buyers |
| Answer» C. Industries that sell to domestic and foreign buyers | |
| 21. |
If a country has a linear (downward sloping) production possibilities |
| A. | constant opportunity costs |
| B. | decreasing opportunity costs |
| C. | first increasing and then decreasing opportunity |
| D. | increasing opportunity costs. |
| Answer» A. constant opportunity costs | |
| 22. |
Boeing aircraft company was able to cover its production costs of the first ―jumbo jetǁ in the seventies because Boeing could market it to several foreign airlines in addition to domestic airlines. This illustrates: |
| A. | How economies of scale make possible a larger variety of products in international trade. |
| B. | A transfer of wealth from domestic consumers to domestic producers as the result of trade |
| C. | How a natural monopoly is forced to behave more competitively with international trade |
| D. | How a natural monopoly is forced to behave less competitively with international trade |
| Answer» A. How economies of scale make possible a larger variety of products in international trade. | |
| 23. |
Wassily Leontief used an input-output table in order to test the |
| A. | Ricardian theory of comparative |
| B. | Heckscher Ohlin theory of comparative |
| C. | Linder theory of overlapping demand |
| D. | all of the above |
| Answer» B. Heckscher Ohlin theory of comparative | |
| 24. |
Which of the following is one of the conclusions of New Trade Theory |
| A. | Countries as a while must gain from trade |
| B. | A country can only hurt itself by using government policies |
| C. | Consumers gain from the increased variety of goods that trade makes |
| D. | A country may export a good or import it, but not both |
| Answer» C. Consumers gain from the increased variety of goods that trade makes | |
| 25. |
.A tax of 20 cents per unit of imported cheese would be an example of a (an): |
| A. | Compound tariff |
| B. | Effective tariff |
| C. | Ad valorem tariff |
| D. | Specific tariff |
| Answer» D. Specific tariff | |
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