PPSC Economics Topic 5 International Economics With Answers

PPSC Economics Topic 5 International Economics

Sr. # Questions Answers Choice
1 In the balance of payments, travel and tourism are included in the category of unilateral transfers Capital account Merchandise account Services account
2 Debit entries on the balance of payments are the entries that would. Mean a loss of foreign exchange Bring foreign exchange into the country Indicate a surplus exists Exist at the bottom line a after all accounts are totaled.
3 The current account includes The value of trade in merchandise Services Unilateral transfers All of the above
4 The role of _________ is to direct one nation's savings into investments of another nation Merchandise trade flows Service flows Current account flows Capital flows
5 All of the following are debit items in the balance of payment eexcept. Capital outflows merchandise exports Private gifts to foreigners Foreign and granted to other nations
6 All of the following are credit items in the balance of payments except. Investment inflows Merchandise exports Payment for American service's to foreigners Private give to foreign residents
7 A country transactions with the rest of the world are recorded in the Balance of international indebtedness Balance of financial transactions Balance of payments Income statement
8 When all of the debit or credit items in the balance of payments are combined Merchandise imports equal merchandise exports Capital imports equal capital exports Services exports equal service imports the total surplus or deficit equals zero
9 Debit (-) items in the balance of payments correspond to anything that. Involve receipts from foreigners Involves payments to foreigners Increase the domestic money supply Decrease the demand for foreign exchange
10 Credit (+) items in the balance of payments correspond to anything that. Involves receipts from foreigners Involves payments to foreigners Increases the domestic money supply Decrease the demand for foreign exchange
11 A country that is a net international debtor initially experiences a. Larger savings pool available finance domestic spending Higher interest rate which leads lower domestic investment. Loss of funds to trading partners overseas Decrease in tis services exports to other countire.
12 Multinational corporations Always produce primary goods Always produce manufactured goods Products primary goods or manufactured goods None of the above
13 When imports from a higher cost supplier with in customs union replace imports from a lower cost supplier outside the custom union, there exists. Trade creation Trade diversion Dynamic welfare effects Comprehensive welfare efffects
14 A _________ is a regional trading block in which member countries eliminate intercanal trade barriers but maintain existing barriers against countries that are not members. Free trade area Customs union Common market Monetary union
15 __________ 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. Trade creation Trade diversion Trade exclusion Trade distortion
16 The NAFTA is a Monetary union Free trade area Common market Customs union
17 Poor developing countries typically impose ______ tariffs than rich advanced nations on imports. Lower Higher About the same height None of the above
18 Which of the following organizations primarily provides long term loans to developing countries to help them develop their infrastructure such as schools hospitals and roads. World Bank International Monetary fund Council on foreign Relations Organization of petroleum exporting countries
19 Developing countries that concentrate production in agricultural products or raw materials may face a long run decline in their international terms of trade because of. Inelastic demand for these products in advanced countries. Large increase in the supplies of these products on world markets because of export expansion polices sluggish demand for these products in advanced countries All of the above
20 __________ policies attempt to foster industrialization by establishing high barriers to import of foreign goods to promote local production. absolute advantage Comparative advantage Export led growth Import substitution
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