Question # 1

_____________ represent the most widely used tool in international finance for measuring the average value of a currency relative to a number of other currencies

Choose an answer

Nominal exchange rates

Real exchange rates

Cross exchange rates

Exchange rate indexes

The theory of ___________ suggests that government can assist domestic companies in capturing economic profits from foreign competitors

Choose an answer

International dumping

Countervailing duties

Strategic trade policy

Export promotion policy

The asset market approach is most helpful in explaining.

Choose an answer

Why exchange rate remain quite stable

Why government change their money supplies

Long term exchange rate movements

Short term exchange rate movements

A current account surplus implies that

Choose an answer

The country is a net lender to the rest of the world

The country is running a net capital account surplus

Foreign investment in domestic securities is at very low levels

All of the above

The difference between bid rates and ask rates is called the

Choose an answer

Profit

Arbitrage

Spread

Forward transaction

If a country has a bowed out production possibility frontier then production is said to be subject to.

Choose an answer

Constant opportunity costs

Decreasing opportunity costs

First increasing and than decreasing opportunity costs

Increasing opportunity costs

That the division of labor is limited by the size of th market best applies to which explanation of trade.

Choose an answer

Factor endowment theory

Product like cycle theory

Economics of scale theory

Over lapping demand theory

Trade based on comparative advantage assures that.

Choose an answer

Only the strongest suvrive

Some people are rich and others are poor

Each item is produced using the least amount of time needed to produce it

Each item is produced at as low a cost possible in terms of other things given up

International dumping may involve.

Choose an answer

Selling goods to foreigners at a price below that charged domestic consumers

Selling goods to foreigners at a price below the cost of production

antidumping duties being levied on the imported dumped goods

All of the above

The arrangement where goods imported from trading partners in the developing world are subject to lower tariff rates than goods from other countries is referred to as.

Choose an answer

Normal trade relation status

Most favored nation status

Generalized system of preferences

__________ is a said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries infavor of member countries.

Choose an answer

Trade creation

Trade diversion

Trade exclusion

Trade distortion

According the Hacksher-Ohlin model the source of comparative advantage is a country's

Choose an answer

Technology

Advertising

Factor endowments

both a and c

The comparative advantage model of Ricardo was based on.

Choose an answer

Interindustry specialization and trade

Demand conditions underlying specialization and trade

Income conditions underlying specialization and trade

Tariff levels in advanced countries tend to be ___ tariff levels in developing countries.

Choose an answer

Higher than

Equal to

Lower than

There is no general pattern

A depreciation of the dollar willhave its most pronounced impact on imports if the demand for imports is.

Choose an answer

Constant

Inelastic

Elastic

Unitary elastic

According to the Hackscher - Ohlin model the source of comparative advantage is a country's

Choose an answer

Technology

Advertising

Factor endowments

both a and c

If the home country government grants a subsidy on a domestically produced good domestic producers lend to.

Choose an answer

Capture the entire subsidy in the form of higher profits

Increases their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

A country transactions with the rest of the world are recorded in the

Choose an answer

Balance of international indebtedness

Balance of financial transactions

Balance of payments

Income statement

The term of trade is given by theprices.

Choose an answer

Paid to all goods exported by the home country

Received for all goods exported by the home country

Received for exports and paid for imports.

Of primary products as opposed to manufactured products.

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

Choose an answer

Dual exchange rates

Adjustable pegged exchange rates

Managed floating exchange rates

Crawling pegged exchange rates.

In today world most countries impose tariffs

Choose an answer

Only on imports

Only on exports

On both imports and exports

On imports exports and nontrade goods

More Classes

Other Links

PPSC Economics Chapter 5 International Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer