Question 1

Which one is not associated with the UNO&#10;A)ILO&#10;B)WHO&#10;C)ASEN&#10;D)All of the above

Accepted Answer

ASEAN (Association of Southeast Asian Nations) is not associated with the United Nations Organization (UNO), whereas ILO (International Labour Organization) and WHO (World Health Organization) are specialized agencies of the UN.

Question 2

Which of the following is the main objective behind the establishment of WTO&#10;A)To settle disputes between nations&#10;B)To widen the principle of free trade to sectors such as services and agriculture&#10;C)To cover more areas than GATT&#10;D)All of them

Accepted Answer

The main objective behind the establishment of the World Trade Organization (WTO) encompasses all the given options: to settle disputes between nations, to widen the principle of free trade to sectors such as services and agriculture, and to cover more areas than its predecessor, the General Agreement on Tariffs and Trade (GATT).

Question 3

&#34; Term of trade &#34; between two countries refer to a ratio of&#10;A)Export prices to import prices&#10;B)Currency Values&#10;C)Export to imports&#10;D)Balance of trade to balance of payments

Accepted Answer

The term of trade between two countries refers to the ratio of export prices to import prices. This ratio helps in determining how much import goods a country can get for a unit of its export goods, essentially measuring the country's trading advantage or disadvantage.

Question 4

WTO comes as the third economic pillar of world-wide dimensions along&#10;A)International Monetary Funds&#10;B)international Economic&#10;C)International Funding Organisation (IFO)&#10;D)International Development Bank (IDB)

Accepted Answer

The World Trade Organization (WTO) is considered the third economic pillar of worldwide dimensions alongside the International Monetary Fund (IMF) and the World Bank, not the options listed as B, C, or D. The IMF focuses on monetary cooperation and financial stability, while the World Bank aims at long-term economic development and poverty reduction.

Question 5

Gold standard means&#10;A)Currency of the country is made of&#10;B)Paper currency is not used&#10;C)Currency of the country is freely convertible&#10;D)(A) and (C)

Accepted Answer

The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. With the gold standard, countries agreed to convert paper money into a fixed amount of gold. This system ensures that the government can only print as much money as its country has in gold, thus preventing inflation. However, it does not mean that paper currency is not used; rather, the paper currency is backed by gold, making it convertible into a set amount of gold.

Question 6

Underlying the application of the monopolistic competition model to&#10;A)increases market size&#10;B)allows companies to charge higher price&#10;C)increases consumer choices&#10;D)decreases the number of firms in an industry

Accepted Answer

The answer of Underlying the application of the monopolistic competition...

Question 7

Which of the following trade policies limits specified quantity of goods to be&#10;A)Quota&#10;B)Import tariff&#10;C)Specific tariff&#10;D)All of the above

Accepted Answer

Quotas specifically limit the quantity of goods that can be imported or exported, directly controlling the volume of trade. Tariffs, whether import or specific, impose a tax on goods but do not directly limit quantities.

Question 8

Since 1980s which of the following changes has happened in the world trade?&#10;A)Share of &#34;north-north&#34; trade has decreased in total merchandise exports&#10;B)Share of &#34;south-- south&#34; trade has increased in total merchandise eports&#10;C)share of agriculture produce has decreased in total merchandise exports&#10;D)all of the above

Accepted Answer

Since the 1980s, there have been significant shifts in global trade patterns. The share of "north-north" trade (trade between developed countries) has decreased, while "south-south" trade (trade between developing countries) has increased. Additionally, the share of agricultural produce in total merchandise exports has decreased, as the global economy has become more industrialized and services-oriented.

Question 9

According to Ricardo, a country will have a comparative advantage in:&#10;A)Industries in which there are neither imports nor exports&#10;B)import competiting industrie&#10;C)Industries that sell to domestic and foreign buyers&#10;D)industries that sell to only foreign buyers

Accepted Answer

Ricardo's theory of comparative advantage suggests that a country will have a comparative advantage in industries where it can produce goods at a lower opportunity cost than other countries, regardless of whether those goods are sold domestically or internationally. This means industries that sell to both domestic and foreign buyers can exhibit comparative advantage.

Question 10

If a country has a linear (downward sloping) production possibilities&#10;A)constant opportunity costs&#10;B)decreasing opportunity costs&#10;C)first increasing and then decreasing opportunity&#10;D)increasing opportunity costs.

Accepted Answer

A linear (downward sloping) production possibilities curve indicates constant opportunity costs, as the slope of the line (representing the rate at which one good can be substituted for another) remains unchanged.

Question 11

Which of the following is one of the conclusions of New Trade Theory&#10;A)Countries as a while must gain from trade&#10;B)A country can only hurt itself by using government policies&#10;C)Consumers gain from the increased variety of goods that trade makes&#10;D)A country may export a good or import it, but not both

Accepted Answer

The answer of Which of the following is one of...

Question 12

According to the argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers.&#10;A)Scientific tariff argument&#10;B)Infant industry argument&#10;C)beggar they neighbour argument&#10;D)foreign dumping argument

Accepted Answer

The answer of According to the argument for protection, tariffs...

Question 13

Which of the following does not form part of current account under balance of&#10;A)Export and import of goods&#10;B)Export and import of services&#10;C)Income receipts and payments&#10;D)Capital receipts and payments

Accepted Answer

The answer of Which of the following does not form...

Question 14

Gifts and Relief are&#10;A)Merchandise Payment&#10;B)Service Payment&#10;C)Factory Income&#10;D)Transfer payment

Accepted Answer

The answer of Gifts and Relief are&#10;A)Merchandise Payment&#10;B)Service Payment&#10;C)Factory Income&#10;D)Transfer...

Question 15

A country is said to be in debt trap if&#10;A)It has to abide by the conditionality imposed by the International Monetary Fund&#10;B)It is required to borrow money to make interest payments on outstanding loans&#10;C)It has been refused loans or aid by creditors&#10;D)The World Bank charges a very high rate of interest on outstanding as well as new loans

Accepted Answer

The answer of A country is said to be in...

Question 16

The effective rate of protection&#10;A)distinguishes between tariffs that are effective and those that are ineffective&#10;B)is the minimum level at which a tariff becomes effective in limiting imports&#10;C)shows how effective a tariff is in raising revenue for the government&#10;D)shows the increase in value added for domestic production that a particular tariff structure makes possible, in percentage terms

Accepted Answer

The answer of The effective rate of protection&#10;A)distinguishes between tariffs...

Question 17

Which type of tariff is expressly forbidden by the U.S. Constitution?&#10;A)Import tariff&#10;B)Export tariff&#10;C)Specific tariff&#10;D)Ad valorem tariff

Accepted Answer

The answer of Which type of tariff is expressly forbidden...

Deck 1: International Trade and Economics