McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Economics (CBCS) .
Chapters
| 51. |
The difference in price ratios of two commodities in the two trading countries is |
| A. | Potential gains |
| B. | Partial gains |
| C. | Actual gains |
| D. | None of the above |
| Answer» C. Actual gains | |
| 52. |
The ratio between the quantities of a country’s imports to its exports is known as |
| A. | Commodity or net barter terms of trade |
| B. | Single factoral terms of trade |
| C. | Gross barter terms of trade |
| D. | Double factoral terms trade |
| Answer» C. Gross barter terms of trade | |
| 53. |
J.S.Mill introduced the theory of reciprocal demand to explain |
| A. | Determination of factor endowments |
| B. | Determination of equilibrium terms of trade |
| C. | Determination of availability of resources |
| D. | Determination of equilibrium in balance of payments |
| Answer» B. Determination of equilibrium terms of trade | |
| 54. |
Mill’s theory of reciprocal demand indicates a |
| A. | Country’s demand for one commodity in terms of the quantities of the other country it is prepared to give up in exchange |
| B. | Country’s supply of a commodity in terms of the quantities of the other country it is prepared to give up in exchange |
| C. | Country’s balance of payments |
| D. | Country’s labour cost |
| Answer» A. Country’s demand for one commodity in terms of the quantities of the other country it is prepared to give up in exchange | |
| 55. |
The gains from trade refers to |
| A. | A duty levied on goods when they enter and leave a country’s national boundary |
| B. | A tariff that maximizes a country’s welfare |
| C. | Net benefits or increases in goods that a country gets by trading with other countries |
| D. | The demand and supply curve of a country |
| Answer» C. Net benefits or increases in goods that a country gets by trading with other countries | |
| 56. |
The ratio between the price of a country’s export goods to its import goods is called |
| A. | Income terms of trade |
| B. | Gross barter terms of trade |
| C. | Real cost terms of trade |
| D. | Commodity or net barter terms of trade |
| Answer» D. Commodity or net barter terms of trade | |
| 57. |
An increase in the index of income terms of trade implies that |
| A. | A country cannot import more goods in exchange for its exports |
| B. | A country can import more goods in exchange for its exports |
| C. | A country cannot export more goods in exchange for its imports |
| D. | None of the above |
| Answer» B. A country can import more goods in exchange for its exports | |
| 58. |
The terms of trade refers to the rate |
| A. | At which the goods of one country is exchanged for the goods of another country |
| B. | At which the price of a country’s import is calculated |
| C. | At which the price of a country’s export is calculated |
| D. | All of the above |
| Answer» A. At which the goods of one country is exchanged for the goods of another country | |
| 59. |
The types of terms of trade does not include |
| A. | Utility terms of trade |
| B. | Real cost terms of trade |
| C. | Productive capacity terms of trade |
| D. | Double factoral terms of trade |
| Answer» C. Productive capacity terms of trade | |
| 60. |
In the modern trade theory, the gains from international trade are clearly differentiated between |
| A. | The gains from exchange and the gains from specialization |
| B. | The gains from exchange and income |
| C. | The gains from exchange and price |
| D. | All of the above |
| Answer» A. The gains from exchange and the gains from specialization | |
| 61. |
Under the gains from international trade, the gains from exchange is also known as the |
| A. | Partial gains |
| B. | Consumption gains |
| C. | Domestic gains |
| D. | Price gains |
| Answer» B. Consumption gains | |
| 62. |
In modern trade theory, the gains from specialization is also known as the |
| A. | Constant gains |
| B. | Consumption gains |
| C. | Production gains |
| D. | Internal gains |
| Answer» C. Production gains | |
| 63. |
The terms of trade of a country improves when |
| A. | The import price of a country relatively rises to its export prices |
| B. | The import price of a country is the same with its export prices |
| C. | The export price of a country does not rise in relation to its import prices |
| D. | The export price of a country relatively rises to its import prices |
| Answer» D. The export price of a country relatively rises to its import prices | |
| 64. |
When a country’s import price relatively rises to its export prices, |
| A. | The terms of trade of a country remains the same |
| B. | The terms of trade of a country becomes worsened |
| C. | The terms of trade of a country improves |
| D. | None of the above |
| Answer» B. The terms of trade of a country becomes worsened | |
| 65. |
The various methods of measuring gains from trade does not include |
| A. | Haberler’s approach |
| B. | Ricardo’s-Malthus approach |
| C. | Modern approach |
| D. | Mill’s approach |
| Answer» A. Haberler’s approach | |
| 66. |
According to Jacob Viner, the classical economists measured the gains from trade in terms of |
| A. | Increase in national income |
| B. | Difference in comparative costs |
| C. | Terms of trade |
| D. | All of the above |
| Answer» D. All of the above | |
| 67. |
The classical theorists believed that the gains from trade resulted from |
| A. | Stabilisation of price level |
| B. | Increased production and specialization |
| C. | Exchange and specialization |
| D. | Perfect competition |
| Answer» B. Increased production and specialization | |
| 68. |
The modern economists considered the gains from trade resulted from |
| A. | Increased production and specialization |
| B. | Increased competition |
| C. | Exchange and specialization |
| D. | All of the above |
| Answer» C. Exchange and specialization | |
| 69. |
The concept of single factoral terms of trade was developed by |
| A. | Jacob Viner |
| B. | G.S. Dorrance |
| C. | G.Haberler |
| D. | F.W. Taussig |
| Answer» A. Jacob Viner | |
| 70. |
Mill’s theory of reciprocal demand is based on one of the assumptions that |
| A. | There is less than full employment |
| B. | There is imperfect competition |
| C. | The commodities are produced under the law of constant returns |
| D. | There are transport costs involved |
| Answer» C. The commodities are produced under the law of constant returns | |
| 71. |
When the export prices of a country relatively rises to its import prices, its terms of trade are said to have |
| A. | Deteriorated |
| B. | Improved |
| C. | Remain constant |
| D. | None of the above |
| Answer» B. Improved | |
| 72. |
The concept of gross barter terms of trade was introduced by |
| A. | Jacob Viner |
| B. | Adam Smith |
| C. | Lionel Robbins |
| D. | F.W. Taussig |
| Answer» D. F.W. Taussig | |
| 73. |
A single factoral terms of trade shows that a country’s factoral terms of trade improve as productivity |
| A. | Remains constant in its export industries |
| B. | Improves in its export industries |
| C. | Deteriorates in its export industries |
| D. | Increases in its import industries |
| Answer» B. Improves in its export industries | |
| 74. |
The concept of commodity or net barter terms of trade has been used by economists to measure |
| A. | The gains from domestic trade |
| B. | The gains from internal trade |
| C. | The gains from international trade |
| D. | The gains from prices |
| Answer» C. The gains from international trade | |
| 75. |
The term ‘terms of trade’ between two countries refers to |
| A. | The barter terms of trade |
| B. | The quantity of exports |
| C. | Both (a) and (b |
| D. | The price |
| Answer» A. The barter terms of trade | |
| 76. |
The actual exchange ratio between two countries will depend upon the |
| A. | Supply |
| B. | Price |
| C. | Reciprocal demand |
| D. | All of the above |
| Answer» C. Reciprocal demand | |
| 77. |
In world markets, the actual gain is always less than the potential gain since there is always |
| A. | Perfect completion |
| B. | Imperfect completion |
| C. | Stability |
| D. | None of the above |
| Answer» B. Imperfect completion | |
| 78. |
The theory of gains from trade was at the core of the |
| A. | Technical progress |
| B. | Change in employment |
| C. | Modern theory of international trade |
| D. | Classical theory of international trade |
| Answer» D. Classical theory of international trade | |
| 79. |
Prof. Ronald Findlay modified Ricardo’s measure of gains from trade using |
| A. | A straight line |
| B. | Balance of payments |
| C. | The community indifference curve |
| D. | Short-term and long-term lendings and borrowings |
| Answer» C. The community indifference curve | |
| 80. |
The income terms of trade is called the |
| A. | Capacity to export |
| B. | Capacity to import |
| C. | Capacity to change |
| D. | Capacity to remain constant |
| Answer» B. Capacity to import | |
| 81. |
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 | |
| 82. |
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 | |
| 83. |
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 | |
| 84. |
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 | |
| 85. |
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 | |
| 86. |
Effects of tariffs included |
| A. | Income effect |
| B. | Effect on demand |
| C. | Effect on supply |
| D. | All of the above |
| Answer» A. Income effect | |
| 87. |
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 | |
| 88. |
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 | |
| 89. |
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 | |
| 90. |
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 | |
| 91. |
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 | |
| 92. |
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 | |
| 93. |
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 | |
| 94. |
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 | |
| 95. |
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 | |
| 96. |
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 | |
| 97. |
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 | |
| 98. |
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 | |
| 99. |
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 | |
| 100. |
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 | |
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