Deck 7: Understanding Terms of Trade and International Trade Policies

Question 1

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 1

Terms of trade

Question 2

Px / Pm is

A)Gros barter terms of trade
B)Net Barter terms oftrade
C)Terms of trade
D)Commodity terms of trade

Answer 2

Terms of trade

Question 3

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 3

index ratio

Question 4

If import prices rse more than export prices, terms of trade have -------

A)improved
B)deteriorated
C)increased
D)advanced

Question 5

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

Question 6

A favourable terms of trade indicates -------imports for given exports

A)more
B)less
C)lower
D)same

Question 7

         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

Question 8

A decline in price would increase exports if demand is-------     

A)inelastic
B)elastic
C)constant
D)fluctuating

Question 9

-------introduced the concept of Gross barter terms of trade

A)Adam Smith
B)Alfred Marshall
C)F W Taussig
D)David Ricardo

Question 10

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

Question 11

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

Question 12

J.S.Mill brought in -------factor to explain termsof trade

A)cost
B)demand
C)supply
D)quality

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

According to J S Mill, equilibrium terms of trade is determined by -------demand

A)Market
B)Aggregate
C)Effective
D)Reciprocal

Question 19

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

Question 20

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

Question 21

The offer curve of a country is based on

A)Relative prices
B)Price of exports
C)Price of imports
D)Volume of exports

Question 22

Reciprocal demand is

A)Mutual supply
B)Ratio of volume of
C)Ratio of earnings f
D)Mutual demand of tw

Question 23

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

Question 24

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

Question 25

The classical economist Adam Smith was a champion of -------.

A)Protectionism
B)Free Trade
C)Trade Wars
D)Intra indstry trade