McqMate
Chapters
| 1. |
Trade between two countries is called |
| A. | Internal trade |
| B. | Intra-Country trade |
| C. | Intra-State Trade |
| D. | International Trade |
| Answer» D. International Trade | |
| 2. |
According to Classical economists, _ is the reason for a country to specialie in the production of a commodity |
| A. | Internalisation |
| B. | Cost differences |
| C. | International Division of labor |
| D. | Special Commodities |
| Answer» C. International Division of labor | |
| 3. |
International trade is the result of an advantage country possesses in producing a particular commodity at a _ |
| A. | Lower Cost |
| B. | Equal cost |
| C. | Higher cost |
| D. | Constant Cost |
| Answer» A. Lower Cost | |
| 4. |
Absolute difference in Cost is explained by |
| A. | David Ricardo |
| B. | Adam Smith |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. Adam Smith | |
| 5. |
According to Adam Smith, international trade is advantageous for all participating countries only if they enjoy _ difference in cost of production |
| A. | Comparative |
| B. | Equal |
| C. | Absolute |
| D. | Unequal |
| Answer» C. Absolute | |
| 6. |
Who aid the following, " The esence of international trade is not the absolute difference in cost but a comparative difference in cost." |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. David Ricardo | |
| 7. |
Ricardian theory has _ countries and commodities |
| A. | 32 |
| B. | 23 |
| C. | 24 |
| D. | 22 |
| Answer» D. 22 | |
| 8. |
Which of the following is NOT an assumption of Comparative Cost Advantage Theory? |
| A. | Perfect Competition |
| B. | Increasing return to scale |
| C. | Perfect Mobility of labor within countries |
| D. | Homogenoeus labor |
| Answer» B. Increasing return to scale | |
| 9. |
Comparative Advantage is expressed in _ |
| A. | Absolute Cost |
| B. | Variable cost |
| C. | Cost ratios |
| D. | Marginal Cost |
| Answer» C. Cost ratios | |
| 10. |
England 1 unit wine =1/2unit cloth, Portugal 1 unit wine = 1 unit cloth. This is an example of |
| A. | Comparative Cost |
| B. | Absolute Cost |
| C. | Relative Cost |
| D. | Unequal Cost |
| Answer» A. Comparative Cost | |
| 11. |
Comparative Advantage theory is based on _ value |
| A. | Cost theory |
| B. | Productivity theory |
| C. | Quality theory |
| D. | labor theory |
| Answer» D. labor theory | |
| 12. |
No change in technology, no transport cost, constant returns to scale - these assumptions make the Comparative Cost advantage theory __ |
| A. | Dynamic |
| B. | Redundant |
| C. | Static |
| D. | Unacceptable |
| Answer» C. Static | |
| 13. |
If a country enjoys an absolute advantage in the production of all commodities then also trade is possible”. Who said this? |
| A. | Adam Smith |
| B. | David Ricardo |
| C. | J.S.Mill |
| D. | Alfred Marshall |
| Answer» B. David Ricardo | |
| 14. |
According to H-O theory, International trade is, but a pecial case of _ _ trade. |
| A. | Inter-state |
| B. | Intra state |
| C. | Intra-Country |
| D. | Inter-regional |
| Answer» D. Inter-regional | |
| 15. |
H-o Theory s based on value theory. |
| A. | Partial |
| B. | Semi-partial |
| C. | General |
| D. | Semi-General |
| Answer» C. General | |
| 16. |
H-O Theory is a _ _ model |
| A. | 1 X 1 X 1 |
| B. | 2 X 2 X 2 |
| C. | 3 X 3 X 3 |
| D. | 4 X 4 X 4 |
| Answer» B. 2 X 2 X 2 | |
| 17. |
Commodity Y is Capital intensive if _ _ |
| A. | Ky / Ly = Kx / Lx |
| B. | Ky / Ly < Kx /Lx |
| C. | Ky /Ly > Kx / Lx |
| D. | Ky > Kx |
| Answer» C. Ky /Ly > Kx / Lx | |
| 18. |
If,England 1 wine = 1/2 cloth and if Portugal 1 wine = 1 cloth, this I an example of |
| A. | Comparative advantage |
| B. | Absolute Advantage |
| C. | Similar Cost |
| D. | Unequal Cost |
| Answer» A. Comparative advantage | |
| 19. |
If Commodity Y requres 2 units of capital and 2 units of labor and commodity X requires 1 unit of capital and 4 units of labor then Y is |
| A. | Labor intenive |
| B. | Labor specific |
| C. | Capital Intensive |
| D. | Capital Specific |
| Answer» C. Capital Intensive | |
| 20. |
Factor intensity is measured in _ terms |
| A. | Absolute Cost |
| B. | Factor ratios |
| C. | Relative Cost |
| D. | Frequency of capital labor |
| Answer» B. Factor ratios | |
| 21. |
Total amount of labor in Nation 1 is greater than labor in nation 2 if |
| A. | TK1 /TL1 > TK2 /TL2 |
| B. | TK1 / TL1 < TK2 /TL2 |
| C. | TK1 /TL1 = TK2/TL2 |
| D. | TL1 > TL2 |
| Answer» A. TK1 /TL1 > TK2 /TL2 | |
| 22. |
Factor abundance can be explained using |
| A. | Demand curve |
| B. | Supply curve |
| C. | Tangent |
| D. | PPC |
| Answer» D. PPC | |
| 23. |
A nation is capital abundant if |
| A. | PK1/PL1 < PK2/PL2 |
| B. | PK1/PL1 >PK2/PL2 |
| C. | PK1/PL1 = PK2/PL2 |
| D. | PK1 < PK2 |
| Answer» B. PK1/PL1 >PK2/PL2 | |
| 24. |
Abundance of a factor makes it |
| A. | Easy |
| B. | More |
| C. | Expensive |
| D. | Cheap |
| Answer» D. Cheap | |
| 25. |
r1 / w1 < r2 / w2 means |
| A. | Nation 1 is capital abundant |
| B. | Nation 1 is labor abundant |
| C. | Nation 2 is capital abundant |
| D. | Nation 2 has high wages |
| Answer» A. Nation 1 is capital abundant | |
| 26. |
The rate at which goods are exchangeed between two countries is called |
| A. | Import price |
| B. | Export rate |
| C. | Foreign exchange |
| D. | Terms of trade |
| Answer» D. Terms of trade | |
| 27. |
The ratio of price of export to price of import is called |
| A. | Import price |
| B. | Export rate |
| C. | Foreign exchange |
| D. | Terms of trade |
| Answer» D. Terms of trade | |
| 28. |
Px / Pm is |
| A. | Gros barter terms of trade |
| B. | Net Barter terms oftrade |
| C. | Terms of trade |
| D. | Commodity terms of trade |
| Answer» C. Terms of trade | |
| 29. |
When many commodities are traded terms of trade is expresed as _ of its export pricr to import price |
| A. | sum |
| B. | multiple |
| C. | index ratio |
| D. | index |
| Answer» C. index ratio | |
| 30. |
If import prices rse more than export prices, terms of trade have _ |
| A. | improved |
| B. | deteriorated |
| C. | increased |
| D. | advanced |
| Answer» B. deteriorated | |
| 31. |
The limitations of Commodty terms of trade gave rise to _ |
| A. | Net barter terms of trade |
| B. | gross barter term of trade |
| C. | single factoral terms of trade |
| D. | double fctoral terms of trade |
| Answer» B. gross barter term of trade | |
| 32. |
A favourable terms of trade indicates _ imports for given exports |
| A. | more |
| B. | less |
| C. | lower |
| D. | same |
| Answer» A. more | |
| 33. |
is equally important as price of exports |
| A. | Income from exports |
| B. | Production level of exports |
| C. | amount of labor fromexports |
| D. | raw materials used for exports |
| Answer» A. Income from exports | |
| 34. |
A decline in price would increase exports if demand is__ |
| A. | inelastic |
| B. | elastic |
| C. | constant |
| D. | fluctuating |
| Answer» B. elastic | |
| 35. |
_ _ introduced the concept of Gross barter terms of trade |
| A. | Adam Smith |
| B. | Alfred Marshall |
| C. | F W Taussig |
| D. | David Ricardo |
| Answer» C. F W Taussig | |
| 36. |
Single factoral terms of trade take in to account |
| A. | Export and import prices |
| B. | Changes in efficiency of factors producing export goods |
| C. | Changes in demand for imports |
| D. | Changes in demand for exports |
| Answer» B. Changes in efficiency of factors producing export goods | |
| 37. |
Two countries can gain from foreign trade if |
| A. | Cost ratios are different |
| B. | Price ratios are different |
| C. | Both cost ratios and price ratios are different |
| D. | Tarifs are different |
| Answer» C. Both cost ratios and price ratios are different | |
| 38. |
J.S.Mill brought in _ factor to explain termsof trade |
| A. | cost |
| B. | demand |
| C. | supply |
| D. | quality |
| Answer» B. demand | |
| 39. |
Reciprocal demand is |
| A. | Mutual demand of two countries to each other’s goods |
| B. | Mutual supply |
| C. | price of export and import |
| D. | Investment |
| Answer» A. Mutual demand of two countries to each other’s goods | |
| 40. |
The developing Countries it is argued usually |
| A. | Enjoy Favourable terms of trade |
| B. | Suffers from adverse terms of trade |
| C. | have better income terms of trade |
| D. | have better bargaining power |
| Answer» B. Suffers from adverse terms of trade | |
| 41. |
Comparative advantage occurs when ……..than other country . |
| A. | A country has more population |
| B. | A country can produce more goods |
| C. | A country has a lower opportunity cost in the production of a good |
| D. | A country has more product lines |
| Answer» C. A country has a lower opportunity cost in the production of a good | |
| 42. |
A tariff------ |
| A. | Increases the volume of trade |
| B. | Reduces the volume of trade |
| C. | Has no effect on the volume of trade |
| D. | encourages foreign goods |
| Answer» B. Reduces the volume of trade | |
| 43. |
Terms of trade of less developed countries are generally unfavourable because |
| A. | They export primary goods |
| B. | They export capital goods |
| C. | They export few goods |
| D. | They import few goods |
| Answer» A. They export primary goods | |
| 44. |
According to J S Mill, equilibrium terms of trade is determined by __ demand |
| A. | Market |
| B. | Aggregate |
| C. | Effective |
| D. | Reciprocal |
| Answer» D. Reciprocal | |
| 45. |
Marshall and Edgeworth introduced a geometrical device to explain the gains from trade which is known as |
| A. | Indifference cur |
| B. | Offer curve |
| C. | Isoquant |
| D. | Demand curve |
| Answer» B. Offer curve | |
| 46. |
The concept of offer curves is associated with the names of |
| A. | David Ricardo |
| B. | J S Mill and Alfred |
| C. | Alfred Marshall an |
| D. | Edgeworth and Pareto |
| Answer» C. Alfred Marshall an | |
| 47. |
The offer curve of a country is based on |
| A. | Relative prices |
| B. | Price of exports |
| C. | Price of imports |
| D. | Volume of exports |
| Answer» A. Relative prices | |
| 48. |
Reciprocal demand is |
| A. | Mutual supply |
| B. | Ratio of volume of |
| C. | Ratio of earnings f |
| D. | Mutual demand of tw |
| Answer» D. Mutual demand of tw | |
| 49. |
In a free world in which no restrictions exist, international trade will lead to |
| A. | Reduced real li |
| B. | Reduced efficiency |
| C. | Reduced real GDP |
| D. | Increased efficiency |
| Answer» D. Increased efficiency | |
| 50. |
A commercial policy is a government policy related to _. |
| A. | Commercial transactions of private companies |
| B. | Economic transactions across international borders |
| C. | Commercial transactions of developed countries |
| D. | Taxes |
| Answer» B. Economic transactions across international borders | |
| 51. |
The classical economist Adam Smith was a champion of _ . |
| A. | Protectionism |
| B. | Free Trade |
| C. | Trade Wars |
| D. | Intra indstry trade |
| Answer» B. Free Trade | |
| 52. |
The origin of protectionist policy can be traced back to _ __. |
| A. | Free trade era |
| B. | Mercantilists days |
| C. | Globalisation period |
| D. | Brettonwoods system |
| Answer» B. Mercantilists days | |
| 53. |
Infant Industry Argument is justified for _ . |
| A. | Protecting old industries |
| B. | For enabling competitive efficiency of industries |
| C. | For strengthening public sector |
| D. | For allowing free trade |
| Answer» B. For enabling competitive efficiency of industries | |
| 54. |
Pick out the wrong statement. |
| A. | Tariffs are primarily levied to earn revenue. |
| B. | Tariffs are levied to protect domestic industries. |
| C. | Tariffs reduce the prices of the commodity on which it is levied. |
| D. | Tariffs affect the income and employment. |
| Answer» C. Tariffs reduce the prices of the commodity on which it is levied. | |
| 55. |
Pick out the wrong statement. |
| A. | Tariffs restrict trade |
| B. | Import quotas have a direct effect in reducing imports |
| C. | Voluntary export restraint is an example of tariff barriers. |
| D. | An export subsidy is a government grant given to an export firm. |
| Answer» C. Voluntary export restraint is an example of tariff barriers. | |
| 56. |
Economic integration means. |
| A. | Application of tariffs |
| B. | Removal of customs duties |
| C. | Banning the movement of goods and services |
| D. | banning trade |
| Answer» B. Removal of customs duties | |
| 57. |
_ is the highest form of economic integration. |
| A. | Preferential trading system |
| B. | Free trade union |
| C. | Customs union |
| D. | Economic union |
| Answer» D. Economic union | |
| 58. |
The European Economic Community (EEC) was founded in 1957 under the treaty of _. |
| A. | Paris |
| B. | Rome |
| C. | Washington |
| D. | Veraiiles |
| Answer» B. Rome | |
| 59. |
Pick out the feature which does not describe European Union. |
| A. | Common currency |
| B. | Elimination of customs duties on the movement of goods. |
| C. | Independent policies for agriculture among member nations. |
| D. | Creation of a European Social Fund to improve employment opportunities of workers. |
| Answer» C. Independent policies for agriculture among member nations. | |
| 60. |
European union was initially formed with _ European countries. |
| A. | 27 |
| B. | 28 |
| C. | 6 |
| D. | 5 |
| Answer» C. 6 | |
| 61. |
Prime Minister _ announced the government’s intention that U.K. will not seek permanent membership of the European single market or the EU customs union after leaving the EU. |
| A. | David Cameroon |
| B. | Trump |
| C. | Narendra Modi |
| D. | Theresa May |
| Answer» D. Theresa May | |
| 62. |
The referendum for Brexit was held on _ . |
| A. | July 1st 2017 |
| B. | June 23rd 2016 |
| C. | September 1, 2017 |
| D. | July 23rd 2016 |
| Answer» B. June 23rd 2016 | |
| 63. |
The full form of ASEAN is _ . |
| A. | Association of South East African Nations |
| B. | Association of South Europe Allied Nations |
| C. | Association of South East Asian Nations |
| D. | Association oS Southern,eastern European Nations |
| Answer» C. Association of South East Asian Nations | |
| 64. |
ASEAN was formed with the signing of _. |
| A. | European declaration |
| B. | American declaration |
| C. | Asean declaration |
| D. | Bangkok declaration |
| Answer» D. Bangkok declaration | |
| 65. |
Pick out the wrong statement. |
| A. | The objective of ASEAN is to achieve economic, political, social and cultural co- operation among its members. |
| B. | U.K. is a member of ASEAN |
| C. | There will be free movement of goods and services within ASEAN |
| D. | ASEAN FTA will improve business competitiveness between the members. |
| Answer» B. U.K. is a member of ASEAN | |
| 66. |
The objective of commercial policy is / are _ . |
| A. | increase trade relation |
| B. | endanger domestic market |
| C. | allow import of goods |
| D. | Restrict exports |
| Answer» D. Restrict exports | |
| 67. |
Under free trade _ benefit more. |
| A. | consumer |
| B. | agents |
| C. | middlemen |
| D. | traders |
| Answer» A. consumer | |
| 68. |
Under free trade __ will be higher. |
| A. | wages |
| B. | trade wars |
| C. | civil wars |
| D. | restrictions |
| Answer» A. wages | |
| 69. |
Free trade is based on the principle of _ _ . |
| A. | Comparative cost advantage |
| B. | Comparative disadvantage |
| C. | Production possibility advantage |
| D. | Equal cost |
| Answer» A. Comparative cost advantage | |
| 70. |
Which of the following is not an argument for protectionism . |
| A. | to protect infant industries |
| B. | to increase the level of imports |
| C. | to protect small industries |
| D. | to improve the balance of payments |
| Answer» B. to increase the level of imports | |
| 71. |
A tariff is a tax on _ _ . |
| A. | domestic goods and services |
| B. | foreign goods and service |
| C. | quality of goods |
| D. | None of the above |
| Answer» B. foreign goods and service | |
| 72. |
Protectionism |
| A. | increase the quality of imports |
| B. | decrease the government revenue |
| C. | increase the government earnings from tax |
| D. | decrease the government earnings from tax |
| Answer» C. increase the government earnings from tax | |
| 73. |
Which of the following is an argument far free trade _ . |
| A. | prevents monopolies |
| B. | unfavourable terms of trade |
| C. | unfavourable balance of payments |
| D. | allows monopolies |
| Answer» A. prevents monopolies | |
| 74. |
The main objective of trade barriers are _ . |
| A. | to discourage new industries domestically |
| B. | to reduce unnecessary imports |
| C. | to spend valuable foreign exchange |
| D. | To allow free trade |
| Answer» D. To allow free trade | |
| 75. |
_ is a type of tariff barriers. |
| A. | Embargo |
| B. | Ad–valorem duties |
| C. | Product standard |
| D. | Consular Formalities |
| Answer» B. Ad–valorem duties | |
| 76. |
_ _ is a type of non – tariff barriers. |
| A. | Import Quotas |
| B. | Export duties |
| C. | Import Duties |
| D. | Specific Duties |
| Answer» A. Import Quotas | |
| 77. |
An international trading company of the Government of India _. |
| A. | State Transport Corporation |
| B. | State Service Corporation |
| C. | State Trading Corporation |
| D. | All of the above |
| Answer» C. State Trading Corporation | |
| 78. |
Consular documents include _ _. |
| A. | Certificate of origin |
| B. | Export certificates |
| C. | Uncertified consular invoices |
| D. | Bills of exchange |
| Answer» A. Certificate of origin | |
| 79. |
Trade barriers are often called _ _. |
| A. | Free trade |
| B. | Protection |
| C. | Trade wars |
| D. | Economic integration |
| Answer» B. Protection | |
| 80. |
Redistribution effect is called _ . |
| A. | Revenues effect |
| B. | Consumption effect |
| C. | Productive effect |
| D. | Transfer effect |
| Answer» D. Transfer effect | |
| 81. |
Imposing of tariff, raises domestic prices causing fall in consumption of domestic goods is _ . |
| A. | Protective effect |
| B. | Revenue effect |
| C. | Consumption effect |
| D. | Terms of trade effect |
| Answer» C. Consumption effect | |
| 82. |
_ _ is the World’s largest single market area. |
| A. | European Union |
| B. | India |
| C. | Pakisthan |
| D. | Srilanka |
| Answer» A. European Union | |
| 83. |
At present, European Union consist of _ member countries. |
| A. | 26 |
| B. | 27 |
| C. | 28 |
| D. | None of these above |
| Answer» C. 28 | |
| 84. |
When an economy union involves unifying currency it becomes _ . |
| A. | Customs Union |
| B. | Trade Union |
| C. | Economic and Monetary Union |
| D. | Trade area |
| Answer» C. Economic and Monetary Union | |
| 85. |
_ _ is an official institution of the European Union. |
| A. | European Council |
| B. | European Parliament |
| C. | European Commission |
| D. | European Investment Bank |
| Answer» A. European Council | |
| 86. |
Euro is the official currency for _ _ member countries of European Union. |
| A. | 16 |
| B. | 17 |
| C. | 18 |
| D. | 19 |
| Answer» D. 19 | |
| 87. |
The is the single currency of the European Union. |
| A. | dollar |
| B. | euro |
| C. | yen |
| D. | pound |
| Answer» B. euro | |
| 88. |
_ _ is the second largest currency in the world. |
| A. | Dollar |
| B. | Euro |
| C. | Yen |
| D. | Pound |
| Answer» B. Euro | |
| 89. |
_ _ became an ASEAN dialogue partner in 1995. |
| A. | India |
| B. | Pakisthan |
| C. | Srilanka |
| D. | USA |
| Answer» A. India | |
| 90. |
Look East Policy has now transformed into a _ _. |
| A. | Act European Policy |
| B. | Act East Policy |
| C. | Act West Policy |
| D. | East Asia Policy |
| Answer» B. Act East Policy | |
| 91. |
The referendum for Brexit was held on _ . |
| A. | 2023-06-16 00:00:00 |
| B. | 2023-06-17 00:00:00 |
| C. | 2023-08-17 00:00:00 |
| D. | 2023-06-18 00:00:00 |
| Answer» A. 2023-06-16 00:00:00 | |
| 92. |
ASEAN was formed in . |
| A. | 1947 |
| B. | 1967 |
| C. | 1977 |
| D. | 1987 |
| Answer» A. 1947 | |
| 93. |
_ is a statement of a systematic record of all economic transactions between one country and the rest of the world. |
| A. | Deficit |
| B. | Surplus |
| C. | Balance of payments |
| D. | Budget |
| Answer» C. Balance of payments | |
| 94. |
Pick out the wrong statement. |
| A. | Tariff restricts t |
| B. | Import quotas have a direct effect in reducing imports |
| C. | Voluntary export restraint is an example of tariff barriers. |
| D. | An export subsidy is a government grant given to an export firm |
| Answer» C. Voluntary export restraint is an example of tariff barriers. | |
| 95. |
The consumption effect of tariffs forces consumers to _ _. |
| A. | increase their consumption due to tariffs. |
| B. | pay lower price due to tariffs. |
| C. | reduce their consumption due to tariffs. |
| D. | depend on imports for consumption |
| Answer» C. reduce their consumption due to tariffs. | |
| 96. |
Import embargo is an important retaiatory measure against_ _. |
| A. | dumping |
| B. | exports |
| C. | domestic producer |
| D. | domestic farmers |
| Answer» A. dumping | |
| 97. |
Which of the following Non – Tariff Barriers prevents free movement of capital between countries? |
| A. | preferential government procurement |
| B. | Exchange Controls |
| C. | Domestic subsidie |
| D. | Local content requirement |
| Answer» B. Exchange Controls | |
| 98. |
_ is a measure under which a commodity of a specific volume or value is allowed to be imported in the country. |
| A. | Voluntary Export Restraints |
| B. | Combined duty |
| C. | Import quota |
| D. | Revenue tariff |
| Answer» C. Import quota | |
| 99. |
Which of these are objectives of import quotas? |
| A. | Correcting disequilibrium in the balance of payment |
| B. | To allow dumping |
| C. | To allow speculative activities |
| D. | To allow excess supply in the domestic economy |
| Answer» A. Correcting disequilibrium in the balance of payment | |
| 100. |
In the _ account, only transactions relating to goods are entered. |
| A. | invisible account |
| B. | Capital account |
| C. | trade |
| D. | Current account |
| Answer» C. trade | |
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