Deck 1: International Trade and Economic Theory

Question 1

International trade increases the welfare of ________________

A)only developed countries
B)only exporting countries
C)all participating countries
D)only importing countries

Answer 1

all participating countries

Question 2

Ricardian theory assumes that labour is ________________ within the country.

A)inefficient
B)heterogeneous
C)homogeneous
D)sufficient

Answer 2

homogeneous

Question 3

Income terms of trade indicate increased capacity to ________________.

A)export
B)import
C)profit
D)investment

Answer 3

import

Question 4

An offer curve differs from ________________.

A)usual demand curve
B)usual supply curve
C)indifference curve
D)usual demand and supply curve

Question 5

Utility terms of trade was introduced by ________________.

A)jacob viner
B)frank taussig
C)j. s. mill
D)adam smith

Question 6

When supply of exports is elastic, a country will have ________________ terms of trade.

A)unfavorable
B)favorable
C)income
D)different

Question 7

Hecksher-Ohlin theory states that the relative factor prices in two countries are determined by ________________.

A)labour efficiency
B)capital efficiency
C)technological developments
D)differences in factor endowments

Question 8

________________ is not an objective of commercial trade policy.

A)to determine the rate of interest
B)to protect domestic industries from foreign competition
C)to preserve foreign exchange reserves
D)to maintain favorable balance of payments

Question 9

Tariff rate quotas are ________________

A)based on the value of the traded commodity only
B)low tariff rate on an initial quantity of import within the quota limit and very high tariff rate on imports above the initial amount
C)based on the quantity or volume of the quantity only
D)combination of tariffs and quotas

Question 10

Which of the following is not a NTB?

A)voluntary export restrictions
B)administrative barriers
C)tariff rate quotas
D)local content requirement

Question 11

A free trade area is a trade bloc where ________________

A)countries agree to have a common unified tariff against non-members
B)countries agree to reduce or eliminate tariff barriers on selected goods imported from other member nations
C)countries agree to reduce or eliminate tariff barriers on all goods imported from other member nations
D)all barriers are eliminated to allow free movement of goods, services, capital and labour

Question 12

The ________________ was signed to create the EU in 1993.

A)treaty of london
B)treaty of maastricht
C)treaty of lisbon
D)treaty of rome

Question 13

ASEAN was formed in ________________

A)1967
B)1945
C)1999
D)2000

Question 14

________________ refers to the alliance of multiple countries pursuing common goals.

A)single market
B)multilateralism
C)customs union
D)regionalism

Question 15

WTO was set up on ________________

A)31st july, 1995
B)1st january, 2000
C)1st june, 1985
D)1st january, 1995

Question 16

In the past several years, India's net invisibles were in ________________

A)surplus
B)deficit
C)balance
D)unbalance

Question 17

Private transfers on India's current account include ________________.

A)local withdrawal from nri rupee deposits
B)foreign currency deposits
C)foreign exchange reserves
D)portfolio investment

Question 18

The highest authority of WTO is ________________.

A)the dispute settlement body
B)the ministerial conference
C)the trade policy review body
D)the general council

Question 19

________________ is not a direct measures to correct BoP disequilibrium.

A)tariffs
B)devaluation of exchange rate
C)import substitution
D)quotas

Question 20

Portfolio foreign investment is included in ________________ account of BoP.

A)capital
B)trade
C)debit
D)current

Question 21

Forward market in foreign exchange refers to ________________ market.

A)a long run
B)a short run
C)a spot
D)short and long run

Question 22

________________ is not a detect of flexible exchange rate.

A)speculation
B)structural unemployment
C)stability in international monetary system
D)discourages investments

Question 23

The function of foreign exchange market that helps in clearing international transactions is known as ________________.

A)speculation
B)hedging
C)transfer
D)credit

Question 24

When the demand curve for foreign currency, intersects the supply curve, we get ________________ exchange rate.

A)par
B)discount
C)equilibrium
D)premium

Question 25

________________ of goods results in demand for foreign currency.

A)sale in inter-national market
B)export
C)sale in domestic market
D)import