Q. If { } > { } when K= capital and L= labour, and A and B are countries then
✅ Correct Answer: (B)
counry a is capital abundant
International Economics MCQs and Notes
Q. Hedcging refers to
✅ Correct Answer: (B)
covering foreign exchange risk
Q. The Exchange rate is kept the same in all parts of the market through
✅ Correct Answer: (A)
exchange rate arbiterage
Q. Leontiff paradox refers to the result that the U S
✅ Correct Answer: (D)
import substitutes are more capital intensive than u s exports
Q. The H O theory postulates that as a result of trade the differences in factor prices between nations
✅ Correct Answer: (A)
diminishes
Q. If a nations terms of trade is ½ its trade partners terms of trade is
✅ Correct Answer: (B)
2
Q. Given below is a table whowing the maximum amount of wheat and cloth that the U K and U S could produce if they fully utilize all the factors of production with the best technology available indicate the comparative advantage of U K and U S. U K U S Bushels of wheat 50 120 Meters of Cloth 150 80
✅ Correct Answer: (A)
us have comparative advantage in cloth and u k have comparative advantage in wheat
Q. If a nation gains from trade its consumption point is
✅ Correct Answer: (C)
above the ppc
Q. The opportunity cost theory assumes that
✅ Correct Answer: (D)
non of the above
Q. The terms of trade of developing countries have a secular tendency to
✅ Correct Answer: (B)
deteriorate