PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 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
2 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
3 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.
4 Multinational corporations Always produce primary goods Always produce manufactured goods Products primary goods or manufactured goods None of the above
5 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
6 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
7 __________ 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
8 The NAFTA is a Monetary union Free trade area Common market Customs union
9 Poor developing countries typically impose ______ tariffs than rich advanced nations on imports. Lower Higher About the same height None of the above
10 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
11 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
12 __________ 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
13 Tariff levels in advanced countries tend to be ___ tariff levels in developing countries. Higher than Equal to Lower than There is no general pattern
14 Import substitution is an example of The principle of comparative advantage The pricnipal of absolute advantage An outward looking growth strategy An inward looking growth strategy
15 Which of the following strategies have developing countries not used to deal with the problem of unstable export markets. Multilateral contracts Production and export controls Buffer stock arrangements Tariff rate quotes
16 Among the institutions and polices that have been created to support developing countries are. the World bank The international Monetary Fund The Generalized system of Preferences All of the above
17 To stabilize the prices of primary products international commodity agreements have utilized all of the following except. Tariff -rate quotas applied to imported goods. Production and export controls. Buffer stocks Multilateral contracts
18 All of the following are trade problems of developing countries except. Unstable export markets improving terms of trade Limited access to the markets of industrial countries Highly elastic demand curves for their products.
19 To help developing nations strengthen their international competitive rises many industrial nations have granted non nations udder the . International commodity engravement's program Multilateral contract program Generalized system of preferences program Export led growth program
20 To be considered a good candidate for an export cartel a commodity should. Be a manufactured good Be a primary product Have a high price elasticity of supply Have a low price elasticity of demand
21 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. Normal trade relation status Most favored nation status Most favored nation status Generalized system of preferences
22 A widely used indicator to differentiate developed countries from developing countries is. International trade per captia Real income per capita Unemployment per capita Calories per capita
23 Which industrialization policy has developing countries used which places emphasis on the comparative advantage principle as a guide to resource allocation. Export promotion Import substitution International commodity agreements Multilateral contrracts.
24 The theory of ___________ suggests that government can assist domestic companies in capturing economic profits from foreign competitors International dumping Countervailing duties Strategic trade policy Export promotion policy
25 The organization that currently establishes rules of conduct for firms engaging in international trade is the. World Bank International Trade commission Department of Justice World Trade Organization
26 The effect of the most favored nation clause is to. Eliminate all tariffs between countries Increase all tariff rates between countries. Maintain a nondiscriminatory structure of tariffs Maintain a discriminatory structure of tariffs
27 The result of antidumping tariffs is to. increase consumer surplus in the importing country Decrease producer surplus in the importing country Impose a price floor on foreign prices in the importing country Impose a price celling on foreign prices in the importing county
28 Anti dumping duties applied to imported goods. Are abolished by the world Trade Organization Result in decreases in consumer surplus for domestic households Are imposed by industrial countries but not developing countries. Result in lower priced goods for domestic consumers
29 The world trade organization is sometimes criticized for all of the following reasons except. If reduces the sovereignty of member countries. Favors free trade over the quality of the environment It has no way to solve trade disputes among member countries. It is a "puppet" of multinational corporations
30 All of the following are fundamental to the world trade organization except. Bilateral tariff reductions to promote trade liberalization. the use of the most favored nation clause Nondiscrimination trading relationships The prohibition of import quotas and export quotas
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