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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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