McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Economics (CBCS) .
Chapters
| 1. |
The tariff that maximizes a country’s welfare is called the |
| A. | Double column tariff |
| B. | Maximum and minimum tariff |
| C. | Optimum tariff |
| D. | None of the above |
| Answer» C. Optimum tariff | |
| 2. |
Ad valorem tariffs are |
| A. | Duties levied per physical unit of the commodity imported |
| B. | Duties levied as fixed percentage of the value of the imported commodity |
| C. | Duties which tend to vary with the prices of the imported commodities |
| D. | None of the above |
| Answer» B. Duties levied as fixed percentage of the value of the imported commodity | |
| 3. |
On the basis of origin and destination of goods, tariff may be classified into |
| A. | Specific duties, ad valorem duties and compound duties |
| B. | Single-column tariff, double-column tariff and triple column tariff |
| C. | Export duties, import duties and transit duties |
| D. | All of the above |
| Answer» B. Single-column tariff, double-column tariff and triple column tariff | |
| 4. |
Specific tariffs are assessed |
| A. | On the value of product |
| B. | On the basis of subsidies |
| C. | On the basis of physical weight |
| D. | On the basis rate fixed by the government |
| Answer» C. On the basis of physical weight | |
| 5. |
A quota which established thorough mutual agreements or negotiation between countries is |
| A. | Allocated quota |
| B. | Unilateral quota |
| C. | Import-export quota |
| D. | Bilateral quota |
| Answer» D. Bilateral quota | |
| 6. |
Effects of tariffs included |
| A. | Income effect |
| B. | Effect on demand |
| C. | Effect on supply |
| D. | All of the above |
| Answer» A. Income effect | |
| 7. |
When a uniform rate of duty is imposed on all similar commodities irrespective of the country from which they are imported, it is called |
| A. | Single-column tariff |
| B. | Protective tariff |
| C. | Conventional tariff |
| D. | Double-column tariff |
| Answer» A. Single-column tariff | |
| 8. |
A quota system which allows a certain specified quantity of a commodity to be imported duty free or at a low rate of import duty is |
| A. | Bilateral quota |
| B. | Global quota |
| C. | Tariff or custom quota |
| D. | Unilateral quota |
| Answer» C. Tariff or custom quota | |
| 9. |
The tariff rates which are based on trade agreements or treaties with other countries is known as |
| A. | Revenue tariffs |
| B. | Protective tariffs |
| C. | Multiple column tariff |
| D. | Conventional tariff |
| Answer» D. Conventional tariff | |
| 10. |
Which of the following is not included in the effects of quotas |
| A. | Price effect |
| B. | Consumption effect |
| C. | Income effect |
| D. | Protective effect |
| Answer» C. Income effect | |
| 11. |
imposition of a tariff improves the terms of trade of the imposing country but reduces its |
| A. | Commodity prices |
| B. | Volume of trade |
| C. | Cost of production |
| D. | None of the above |
| Answer» B. Volume of trade | |
| 12. |
A tariff results in an improvement in terms of trade on one hand and on the other hand, increases the |
| A. | Demand of the commodity |
| B. | Price of the commodity |
| C. | Level of welfare |
| D. | Gains from trade |
| Answer» C. Level of welfare | |
| 13. |
The positive effect of a tariff is, when there is an increase in the welfare of a country due to |
| A. | An improvement in the terms of trade |
| B. | An increase in its volume of trade |
| C. | A reduction in its volume of trade |
| D. | A decrease in its volume of trade |
| Answer» A. An improvement in the terms of trade | |
| 14. |
There is an improvement in the welfare of country only when the |
| A. | Positive effect of a tariff is lesser than its negative effect |
| B. | Positive effect is larger than its negative effect |
| C. | Positive effect of a tariff is equal to its negative effect |
| D. | None of the above |
| Answer» B. Positive effect is larger than its negative effect | |
| 15. |
A trade policy without tariffs and other quantitative restrictions blocking the movement of goods between countries is |
| A. | Import policy |
| B. | Export policy |
| C. | Free trade policy |
| D. | Exim policy |
| Answer» C. Free trade policy | |
| 16. |
Protection refers to a policy where |
| A. | Export industries are to be protected from competition |
| B. | Domestic industries are to be protected from foreign competition |
| C. | Optimum utilization of resources takes place |
| D. | There is optimization of consumption |
| Answer» B. Domestic industries are to be protected from foreign competition | |
| 17. |
A tax or duty levied on goods when it enters or leave the national boundary of a country is called |
| A. | Tariff |
| B. | Quotas |
| C. | External economics |
| D. | Balance of payment |
| Answer» A. Tariff | |
| 18. |
When government levies import duties which varies with prices of commodities imported , it is called |
| A. | Ad valorem duty |
| B. | Specific duty |
| C. | Compound duty |
| D. | Sliding scale duty |
| Answer» D. Sliding scale duty | |
| 19. |
Which of the following is not the effect of tariff? |
| A. | Balance of payments effect |
| B. | Terms of trade effect |
| C. | competive effect |
| D. | none of the above |
| Answer» D. none of the above | |
| 20. |
Prof. Kindleberger calls the combined protective and consumption effect as |
| A. | Cost of the tariff |
| B. | Trade effect |
| C. | Income effect |
| D. | Revenue effect |
| Answer» B. Trade effect | |
| 21. |
Under the redistribution effect of tariff, the loss of consumer’s surplus is neither transferable to the produces nor to the government and is called by Kindleberger as the |
| A. | Deadweight loss of the tariff |
| B. | Cost of the tariff |
| C. | Both (a) and (b |
| D. | All of the above |
| Answer» D. All of the above | |
| 22. |
Under the effects of a tariff under partial equilibrium analysis, the revenue effect is the change in government receipts due to |
| A. | Producer’s surplus |
| B. | Consumer’s satisfaction |
| C. | Imposition of tariff |
| D. | Loss of consumer’s surplus |
| Answer» C. Imposition of tariff | |
| 23. |
The increase in the domestic production of a commodity due to imposition of a tariff is |
| A. | Protective or production |
| B. | Consumption effect |
| C. | Terms of trade effect |
| D. | Competitive effect |
| Answer» A. Protective or production | |
| 24. |
Import quotas may be fixed either in terms of quantity or |
| A. | The supply of the product |
| B. | The value of the product |
| C. | Consumption of the product |
| D. | Demand of the product |
| Answer» B. The value of the product | |
| 25. |
The physical limitation of quantities of different products to be imported from foreign countries within a specified period of time is called |
| A. | Revenue tariff |
| B. | Gains from trade |
| C. | Import quota |
| D. | Optimum tariff |
| Answer» C. Import quota | |
| 26. |
Import quotas include |
| A. | Ad valorem duty |
| B. | Tariff or custom quota |
| C. | Specific duty |
| D. | Compound duty |
| Answer» B. Tariff or custom quota | |
| 27. |
The effects of quota under partial equilibrium include |
| A. | Redistributive effect |
| B. | Consumption effect |
| C. | Price effect |
| D. | All of the above |
| Answer» D. All of the above | |
| 28. |
When import quotas are fixed after negotiations between the importing and exporting countries, it is known as |
| A. | Import licensing |
| B. | Mixing quota |
| C. | Bilateral quota |
| D. | Unilateral quota |
| Answer» C. Bilateral quota | |
| 29. |
The objective of import quotas include |
| A. | To protect domestic industries from foreign competition by restricting imports |
| B. | To stabilize and maintain the external price level by regulating exports |
| C. | To correct adverse balance of payments restricting exports |
| D. | None of the above |
| Answer» A. To protect domestic industries from foreign competition by restricting imports | |
| 30. |
Under the unilateral quota system, the autonomously fixed quota may either be |
| A. | Fixed or variable |
| B. | Positive or negative |
| C. | Global or allocated |
| D. | All of the above |
| Answer» C. Global or allocated | |
| 31. |
A tariff or custom quota may either be |
| A. | Increasing or decreasing |
| B. | Fixed or variable |
| C. | Unilateral or bilateral |
| D. | Autonomous or agreed |
| Answer» D. Autonomous or agreed | |
| 32. |
The system devised to administer the types of quotas is |
| A. | Tariff quota |
| B. | Import licensing |
| C. | Export duties |
| D. | None of the above |
| Answer» B. Import licensing | |
| 33. |
The quota system in which domestic producers of a quota fixing country are required to make use of both domestic raw materials and a specified proportion of imported raw materials to produce a product |
| A. | Bilateral quota |
| B. | Tariff or custom quota |
| C. | Import quota |
| D. | Mixing quota |
| Answer» D. Mixing quota | |
| 34. |
Tariff can be levied upon |
| A. | Export only |
| B. | Import only |
| C. | Both exports and imports |
| D. | Partly exports partly imports |
| Answer» C. Both exports and imports | |
| 35. |
The tariffs or duties levied upon goods originating from abroad and scheduled for the home country are |
| A. | Exim duties |
| B. | Import duties |
| C. | Export duties |
| D. | None of the above |
| Answer» B. Import duties | |
| 36. |
High tariffs have the effect of restricting |
| A. | The volume of international trade |
| B. | The price of goods |
| C. | The quantity of goods |
| D. | All of the above |
| Answer» A. The volume of international trade | |
| 37. |
A tariff or import duty which are a combination of the ad valorem and specific duty |
| A. | Transit duty |
| B. | Sliding scale duty |
| C. | Revenue tariff |
| D. | Compound duty |
| Answer» D. Compound duty | |
| 38. |
On the basis of retaliation, tariffs can be of the types of |
| A. | Revenue and protective tariffs |
| B. | Retaliatory and countervailing tariffs |
| C. | Non-discriminatory and discriminatory tariffs |
| D. | Double column or multiple tariffs |
| Answer» B. Retaliatory and countervailing tariffs | |
| 39. |
Once import quota is levied on a commodity, the domestic price of the commodity |
| A. | Fluctuates |
| B. | Remains constant |
| C. | Decreases |
| D. | Rises |
| Answer» D. Rises | |
| 40. |
An increase in domestic production of goods due to imposition of import quota is called |
| A. | Protective or production effect |
| B. | Consumption effect |
| C. | Revenue effect |
| D. | Price effect |
| Answer» A. Protective or production effect | |
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