PPSC Economics Topic 5 International Economics With Answers

PPSC Economics Topic 5 International Economics

Sr. # Questions Answers Choice
1 The institutional framework developed in 1974 to promote trade liberalization is known as. WTO GATT IMF World bank
2 According to the cost based definition of dumping occurs when a firm sells a product abroad at a price that is less than Average total cost Average variable cost Average fixed cost Marginal cost
3 Nontariff trade barriers could include all of the following except. Domestic content laws Government procurement polices Health , safety, and environmental standards Antidumping counter/vialling duties applied to imports.
4 International dumping may involve. 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
5 Similar to import tariffs import quotas tend to result in. Higher prices ad reduced imports Increased government revenue Increases consumer surplus Decreased producer surplus
6 ___________ are quotas that lead to a complete abolishment of trade. Nontariff barriers Embargoes Voluntary export restraints Orderly marketing agreements
7 Quotas are government imposed limits on the ___ of goods trade between countries. Prices Quantity Revenue Costs
8 If the home country government grants a subsidy on a domestically produced good domestic producers lend to. 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
9 A tariff -rate quota Is a limit on the number of tariff that a country can place on imports Uses a single tariff along with import quotas to restrict imports Is decreased to avoid the price increase caused by simple tariffs Is a two tier tariff system intended to restrict imports
10 Import quotas tend to result in all of the following except. Domestic producers of the imported good being harmed Domestic consumers of the imported good being harmed Prices increasing in the importing country Price failing in the exporting country.
11 A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a Domestic subsidy Export subsidy Import quota Export quota
12 If import licenses are auctioned off to domestic importers in a competitive market their scarcity value accurse to. Foreign corporations Foreign workers Domestic corporations The domestic government
13 The national security argument for protection is more likely to be valid when The purpose is to maintain protection for an indefinite time period. The industry is characterized by increasing returns to scale. the economy operates during a recession The protected industry provides invaluable goods during periods of war
14 If a small country imposes a tariff on an imported goods terms of trade will Improve worsen Not change any of the above
15 In today world most countries impose tariffs Only on imports Only on exports On both imports and exports On imports exports and nontrade goods
16 In developed countries tariffs on raw materials tend to be. Highest of all Higher than on manufactured goods Equal to tariffs on manufactured goods Lower than on manufactured goods
17 A tariff can ___________ raise a country's welfare Never Sometimes always None of the above
18 The difference between what consumers have to pay for a particular and what they are willing to pay is known as. Consumer surplus Producer surplus Dead weight costs Dead weight surplus
19 A tariff that prohibits imports has only a revenue effect and redistribution effect Revenue effect and protection effect Consumption effect and protection effect Redistribution effect and consumption effect
20 Most tariffs have Only revenue effects Only protective effects Both protective ad revenue effects Neither protective or revenue effects
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