PPSC Economics Topic 5 MCQS Test Preparation

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MCQ's Test For PPSC Economics Topic 5 International Economics

Try The MCQ's Test For PPSC Economics Topic 5 International Economics

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PPSC Economics Topic 5 International Economics

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Question # 1

If the international terms of trade settle at a level that is between each country's opportunity cost.

Question # 2

Multinational corporations

Question # 3

If a small country imposes a tariff on an imported goods terms of trade will

Question # 4

A tax of 18 cents per unit of imported cheese would be an example of a.

Question # 5

A primary reason why nations conduct international trade is because.

Question # 6

A current account surplus implies that

Question # 7

The gain from international trade are closely related to.

Question # 8

Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove payments disequilibrium.

Question # 9

The "balance of trade" is a record of.

Question # 10

Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of.

Question # 11

The balance of trade can only worsen if income_______ relative to absorption

Question # 12

The Hecksher Ohlin theory explains comparative advantage as the result of difference in countries.

Question # 13

Should international transpiration costs decrease the effect on international trade would include a.

Question # 14

Prohibiting a trade between two people

Question # 15

Mercantilism.

Question # 16

Wassily Leontief used an input output table in order to test the.

Question # 17

The factor endearment model of international trade was developed by.

Question # 18

A nation wishing to reduce its current account deficit would be advised to.

Question # 19

A nation with a current account deficit will be

Question # 20

International trade in goods and services tends to

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Sr.# Question Answer
1 A tax of 18 cents per unit of imported cheese would be an example of a.
A. Compound tariff
B. Effective tariff
C. Ad valorem tariff
D. Specific tariff
2 All of the following are credit items in the balance of payments except.
A. Investment inflows
B. Merchandise exports
C. Payment for American service's to foreigners
D. Private give to foreign residents
3 If tastes are identical between countries then comparative advantage is determined by
A. Supply conditions only
B. Demand conditions only
C. Supply and demand conditions
D. Can't tell without more information.
4 International dumping may involve.
A. Selling goods to foreigners at a price below that charged domestic consumers
B. Selling goods to foreigners at a price below the cost of production
C. antidumping duties being levied on the imported dumped goods
D. All of the above
5 The balance of trade can only worsen if income________ relative to absorption
A. Increases
B. Decreases
C. Adjustment mechanism
D. Currency contract period
6 Industrial policies intended to foster comparative advantage for domestic industries could result in the implementation of.
A. Research and development subsides.
B. Loan guarantees
C. Low interest rate loans
D. All of the above
7 The result of antidumping tariffs is to.
A. increase consumer surplus in the importing country
B. Decrease producer surplus in the importing country
C. Impose a price floor on foreign prices in the importing country
D. Impose a price celling on foreign prices in the importing county
8 If a nation has an open economy it means that the nation.
A. Allows private ownership of capital
B. Has flexible exchange rates
C. Has fixed exchange rates
D. Conducts trade with other countries
9 When one country provides most favored nation status for another if agrees to.
A. Change that nation's product a lower tariff than any other nations
B. Charge that nation's products a tariff rate no higher than that on any other nation.
C. Charge that nation's products a higher tariff than any other nation's
D. Export to that nation any products that it wants to purchase
10 ___________ are quotas that lead to a complete abolishment of trade.
A. Nontariff barriers
B. Embargoes
C. Voluntary export restraints
D. Orderly marketing agreements
11 A feasible effect of international trade is that a
A. Monopoly in the home market become an oligopoly in the world market
B. Oligopoly in the home market becomes a monopoly in the world market
C. Purely competitive firm in the home market becomes an oligopolistic
D. Purely competitive firm in the home market becomes a monopolist
12 All of the following are trade problems of developing countries except.
A. Unstable export markets
B. improving terms of trade
C. Limited access to the markets of industrial countries
D. Highly elastic demand curves for their products.
13 Should international transpiration costs decrease, the effect on international trade would include a.
A. Increase in the volume of trade
B. smaller gain from trade
C. Decline in the income of home producers
D. Decrease in the level of specialization production.
14 Most tariffs have
A. Only revenue effects
B. Only protective effects
C. Both protective ad revenue effects
D. Neither protective or revenue effects
15 Small nations whose trade and financial relationships are mainly with a single partner tend to utilize.
A. Pegged exchange rates
B. Freely floating exchanged rates
C. Managed floating exchange rates
D. Crewing exchange rates.
16 An important feature of a___ is that the holder has the right , but not the obligation, to buy or sell currency
A. Swap
B. Foreign exchange arbitrage
C. Foreign exchange option
D. Futures market contract
17 That the division of labor is limited by the size of th market best applies to which explanation of trade.
A. Factor endowment theory
B. Product like cycle theory
C. Economics of scale theory
D. Over lapping demand theory
18 The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is.
A. Freely fluctuating exchange rates
B. Adjustable pegged exchange rates
C. Managed floating exchange rate.
D. Pegged or fixed exchange rates
19 Mercantilism.
A. Is the philosophy of free international trade.
B. Was a system of export promotion and barriers to imports practiced by government .
C. Was praised by Adam Smith in the Wealth of Nations
D. Both a and c
20 The difference between a country's balances of payments and its balance of international indebtedness.
A. Is equal of official reserve transactions
B. Occurs because of foreign exchange fluctuations
C. Reflects statistical discrepancies
D. Reflects the difference between flow and stock concepts

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