International Economics MCQs and Notes

I
Add MCQ, ...................................
📊 International Economics
Q. By adjusting the model of comparative advantage to include transportation costs along with production costs, we would expect
  • (A) the prices of traded goods to be lower than when there are no transportation costs
  • (B) specialization to stop when the production costs of the trading partners equalize
  • (C) the volume of trade to be less than when there are no transportation costs
  • (D) the gains from trade to be greater than when there are no transportation costs.
💬 Discuss
✅ Correct Answer: (C) the volume of trade to be less than when there are no transportation costs
📊 International Economics
Q. In his empirical test of comparative advantage, Wassily Leontief found that
  • (A) U.S. exports are capital intensive relative to U.S. imports
  • (B) U.S. imports are labor intensive relative to U.S. exports
  • (C) U.S. exports are neither labor nor capital intensive
  • (D) None of the above
💬 Discuss
✅ Correct Answer: (D) None of the above
📊 International Economics
Q. Which of the following is NOT true regarding international capital markets?
  • (A) There are special regulations in many countries with respect to foreign investment.
  • (B) The volume of trade on capital markets is lower ever since the "debt crisis" of 1982.
  • (C) Nations can default on their debt and may not be brought to court.
  • (D) Currency fluctuations add instability.
💬 Discuss
✅ Correct Answer: (B) The volume of trade on capital markets is lower ever since the "debt crisis" of 1982.
📊 International Economics
Q. How are international trade policies governed?
  • (A) By the IMF.
  • (B) They are not governed by anyone.
  • (C) By the GATT.
  • (D) By the U.N.
💬 Discuss
✅ Correct Answer: (C) By the GATT.
📊 International Economics
Q. Many countries were fixing the price of their currency in terms of gold:
  • (A) Before World War I.
  • (B) During World War I.
  • (C) After World War II.
  • (D) During World War II.
💬 Discuss
✅ Correct Answer: (A) Before World War I.
📊 International Economics
Q. What are most trade policies driven by?
  • (A) Conflicts of interest between nations.
  • (B) Conflicts of interest within nations.
  • (C) Disagreements regarding who should produce certain products.
  • (D) Disagreements on the prices of major commodities.
💬 Discuss
✅ Correct Answer: (B) Conflicts of interest within nations.
📊 International Economics
Q. Which of the following theories was proposed by David Ricardo?
  • (A) Theory of differences in labor productivity.
  • (B) Theory of differences in climate and resources.
  • (C) Theory of random components determining the pattern of trade.
  • (D) Theory of differences in factor endowments.
💬 Discuss
✅ Correct Answer: (A) Theory of differences in labor productivity.
📊 International Economics
Q. Why do some people argue against free international trade?
  • (A) Trade alters the distribution of income between broad groups of people.
  • (B) Free trade threatens our country's security.
  • (C) There is disagreement on whether or not there are gains from trade.
  • (D) The U.S. is a large country and therefore does not gain from international trade.
💬 Discuss
✅ Correct Answer: (A) Trade alters the distribution of income between broad groups of people.
📊 International Economics
Q. The term "gains from trade" describes:
  • (A) The fact that when two countries trade, both are better off.
  • (B) Consumer surplus.
  • (C) Profits made by businessmen involved in international trade.
  • (D) Producer surplus.
💬 Discuss
✅ Correct Answer: (A) The fact that when two countries trade, both are better off.
📊 International Economics
Q. Which of the following is NOT true?
  • (A) Small countries depend more on trade than large countries.
  • (B) U.S. imports exceed U.S. exports.
  • (C) Economists believe that international trade is beneficial for all countries involved in it, in most cases.
  • (D) Imports cannot exceed exports for an extended period of time.
💬 Discuss
✅ Correct Answer: (D) Imports cannot exceed exports for an extended period of time.

More Faculties

Click on sub category to learn more.

📱 Download Our App

Learn MCQs on the go with our easy-to-use Android app

Get it on Google Play