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MCQ International Trade
MCQ International Trade
University of Calicut
MA Economics – III Semester
A. Population
B. Inflation
C. Economy
D. Trade Barriers
D. The diluting the international business laws & conditions between countries.
A. International
B. National
C. Transnational
D. Global
A. Internal Business
B. External Trade
C. International Trade
D. Unilateral Trade
A. Imported Tax
B. Tariffs
C. Subsidies
D. Import Quotas
6. _____ means selling the products at a price less than on going price in the market.
A. Quota
B. Tariff
C. Subsidy
D. Dumping
D. Mercantilism Theory
A. Import quotas
B. International tariffs
C. Subsidies
D. Dumping
9. ____ is a group of countries agree to abolish all trade restrictions and barriers.
A. Common market
B. Economic Union
C. Custom Union
A. Export Union
B. European Union
C. EXIM Union
D. Export Union
A. NAFTA
B. IMF
C. IRDB
D. GATT
A. WTO
B. UN
C. GATT
D. NAFTA
A. Imported
B. Exported
C. Transported
D. Both A & B
A. Import Tariff
B. Export Tariff
C. Transport Tariff
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM Trade
B. Specific tariff
C. Ad Valorem tariff
D. A compound tariff
A. EXIM
B. FDI
D. GDP
23. Cash grants, loans at low rate and tax holidays are examples of ______.
A. Quotas
B. Tarifs
C. Subsidies
D. Discounts
A. Foreign Trade
B. Export Trade
C. Import Trade
D. EXIM Trade
C. EXIM Tariff
D. A compound tariff
26. _______ refers to goods imported from one country and are exported to another country.
B. Entrepot trade
C. Export Trade
D. EXIM Trade
A. Adam Smith
B. Ricardo
C. Hicks
D. Arshad
28. Trade between two countries can be useful if cost ratios of goods are:
A. Equal
B. Different
C. Undetermined
D. Decreasing
A. Exports x Imports
B. Exports + Imports
C. Exports - Imports
31. A tariff:
33. Which of the following theories suggests that firms seek to penetrate new markets over
time?
A. Reducing tariffs
B. Sale of goods abroad at low a price, below their cost and price in home market
C. Buying goods at low prices abroad and selling at higher prices locally
a) Absolute cost
b) comparative cost,
d) Zero cost.
d) none of these.
a) inter-regional trade,
b) international trade,
c) domestic trade,
d) a and b both
a) Factor intensity,
b) factor abundance,
c) factor cost,
d) all of these.
b) Mutual supply
d ) Derived demand
a) Stimulates innovations,
c)Diversifies consumption
known as__________
a) General Tariff,
b) Mixed Tariff,
c) Compound Tariff,
d) Countervailing Tariff
c) Administrative barrier
a) 1967,
b) 1945
c) 1999,
d) 2000
a) Offer curve,
b) Demand curve,
c) Supply curves,
d) Contract curve
c) Prevents dumping
a) Labour standards,
b) IPR,
c) Environment,
d) All of these
a) 1995,
b)1985,
c) 1980,
d) 1990
a) 2*2*2
b) 2*2*1
c) 2*3*2
d) 3*2*2
54. When Leontief tested the predictions of the Heckscher-Ohlin theory, he found that in
1947 the United States was exporting relatively labor-intensive goods and importing
relatively capital-intensive goods. This was called the Leontief Paradox. This finding:
b. Contradicted the Heckscher-Ohlin theory as the United States was relatively labor-
abundant.
c. Fit the predictions of the Heckscher-Ohlin theory concerning the trading patterns of a
capital-abundant country.
d. Contradicted the Heckscher-Ohlin theory as the United States was relatively capital-
abundant.
a. Labor abundant country should produce and export labor intensive products to promote
growth
A. Amartya Sen
B. N Kaldor
C. Paul Krugman
D. Jagdish Bhagwati
57. The Rybczynski theorem argues that if one factor of production (e.g. capital) increases in
a country, than the output of goods which are intensive in that factor will
_________________. *
a. increase
b. decrease
58. The Rybczynski theorem implies that immigration will lower wages. *
a. true
b. false
c. uncertain
59. A change in the price of a traded good results in a more than proportional change, in the
same direction, in the price of the factor that is used in the production of that good ore
intensively.” This is the definition of the ___________________. *
a. Stolper-Samuelson theorem
b. Heckscher-Ohlin theorem
c. Rybczynski theorem
60. The idea of factor price equalization implies that, in perfect competition and free trade,
wages across two trading countries will __________________. *
a. converge
b. diverge
62. The Dutch Disease problem arises when a country has such a strong commodity export
that it _________________ the value of that country’s real exchange rate. *
a. stagnates
b. deflates
c. raises
d. lowers
63. The appreciation in the exchange rate due to the strength of a single commodity make is
harder for a country to __________________ goods. *
a. import
b. export
c. price
d. destroy
64. Canada may be a current example of the Dutch Disease. It has lately been exporting more
_______________, but its ______________ sector has been declining.
65. When the value of a country’s currency rises relative to other world currencies, this is an
_______________ of the real exchange rate.
a. appreciation
b. depreciation
c. disinflation
d. stagnation
66. Which trade theory holds that nations can increase their economic well-being by
specializing in the production of goods they produce more efficiently than anyone else?
67. Which of the following holds that a government can improve the economic well-being of
a country by encouraging exports and discouraging imports without a reliance on previous
metals?
a. Mercantilism.
b. Neo-mercantilism.
c. The Leontief paradox.
d. Quotas.
68. Which of the following theories holds that countries will produce and export products that
use large amounts of production factors that they have in abundance?
71. A company of the US has excess products that it does not want to sell into the US market
because it will bring down the domestic price and instead sells it at another country at below
the cost of production. What is this called?
a. Countervailing.
b. International trade
c. Dumping.
d. None of the above.
72. The Stolper-Samuelson Theorem postulates that the imposition of tariff by a nation
causes the real income of the nation’s
73. Which theorem from the Heckcsher-Ohlin model suggests that output will fall in an
industry when there is an increase in the endowment that industry uses least intensively?
a) Stolper-Samuelson theorem
b) Rybczynski theorem
a. Samuelson paradox.
b. Leontief paradox.
c. Haberlar paradox.
d. Lerner paradox.
a. Marshall.
b. Nurkse.
c. Porter.
d. Kravis
a. Schumpeter.
b. Heckschser-Ohlin.
c. Lerner.
d. Samuelson.
78. According to the trade theory of Staffan Linder trade tends to be most pronounced in
manufactured goods when trading countries have ?
79. The Heckscher-Ohlin theory explains comparative advantage as the result of differences
in countries ?
80. According to the factor endowment model of Heckscher and Ohlin, countries heavily
endowed with land will ?
81. hould international transportation costs decrease the effect on international trade would
include a (an) ?
84. The value of foreign trade multiplier will be high under the condition when
86. Technological gap model or Imitation Gap Model was developed by:
a. M.V. Posner
b. Samuelson
c. Ricardo
d. Kravis
87. Direct payments made by the government to domestic companies to encourage exports or
to protect them from imports are known as —
88. A quantitative import or export restriction which prohibits or limits the quantity of a
product being exported or imported is called a(n) —
a. import tariff
b. restraint
c. embargo
d. quota
a. transit tariffs
b. voluntary export restraints
c. orderly marketing arrangements
d. export quotas
90. Which economic growth strategy involves extensive use of trade barriers to protect
developing country industries from the rigors of foreign competition
a. lower prices
b. stable prices
c. higher prices
d. none of the above
91. Strategies for development include
a. import substitution
b. export-led growth
c. (a) and (b)
d. none of the above
92. John Stuart Mill was the founder of the
d. Theory of mercantilism
93. The factor endowment model of international trade was developed by
a. Adam Smith
b. David Ricardo
94. Which trade theory contends that a country that initially develops and exports a new
product may eventually become an importer of it, and may no longer manufacture the
product:
95. ______ 1954 study of U.S. trade patterns showed that U.S. exports were labor-
intensive compared with U.S. imports, even though the United States was widely
regarded as a relatively capital-abundant nation.
a. Paul Samuelson’s
b. Wolfgang Stolpher’s
c. Staffan Linder’s
d. Wassily Leontief’s
96. That the division of labor is limited by the size of the market best applies to which
explanation of
trade:
99. The organization that currently establishes rules of conduct for firms engaging in
international trade is the
a. World Bank
c. Department of Justice
100. Which round of international trade negotiations resulted in the creation of the World
Trade Organization?
ANSWERS
1.c 11.d 21.c 31.b 41.d 51.a 61.c 71.c 81.a 91.c
2.b 12.b 22.d 32.b 42.d 52.b 62.c 72.d 82.d 92.a
3.b 13.d 23.c 33.b 43.b 53.a 63.b 73.b 83.d 93.d
4.c 14.d 24.b 34.b 44.d 54.d 64.b 74.b 84.c 94d
5.b 15.b 25.d 35.a 45.c 55.b 65.a 75.a 85.a 95.d
6.d 16.c 26.b 36.b 46.a 56.d 66.d 76.d 86.a 96.c
7.d 17.a 27.b 37.a 47.a 57.a 67.b 77.d 87.d 97.b
8.a 18.a 28.b 38.d 48.c 58.b 68.a 78.c 88.d 98.a
9.d 19.b 29.c 39.d 49.d 59.a 69.d 79.b 89.b 99.d
10.b 20.c 30.c 40.a 50.b 60.a 70.d 80.c 90.a 100.c