PPSC Economics Full Book MCQ Test With Answers

PPSC Economics Full Book MCQ Test

Sr. # Questions Answers Choice
1 Those who argue in favor of import protection generally give the impression that such restricted trade will. Decrease the level of national security Provide benefits to some particular industry Provide benefits to the entire nation Not yield welfare losses for the nation
2 When one country provides most favored nation status for another if agrees to. Change that nation's product a lower tariff than any other nations Charge that nation's products a tariff rate no higher than that on any other nation. Charge that nation's products a higher tariff than any other nation's Export to that nation any products that it wants to purchase
3 The institutional framework developed in 1974 to promote trade liberalization is known as. WTO GATT IMF World bank
4 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
5 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.
6 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
7 Similar to import tariffs import quotas tend to result in. Higher prices ad reduced imports Increased government revenue Increases consumer surplus Decreased producer surplus
8 ___________ are quotas that lead to a complete abolishment of trade. Nontariff barriers Embargoes Voluntary export restraints Orderly marketing agreements
9 Quotas are government imposed limits on the ___ of goods trade between countries. Prices Quantity Revenue Costs
10 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
11 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
12 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.
13 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
14 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
15 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
16 If a small country imposes a tariff on an imported goods terms of trade will Improve worsen Not change any of the above
17 In today world most countries impose tariffs Only on imports Only on exports On both imports and exports On imports exports and nontrade goods
18 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
19 A tariff can ___________ raise a country's welfare Never Sometimes always None of the above
20 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
21 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
22 Most tariffs have Only revenue effects Only protective effects Both protective ad revenue effects Neither protective or revenue effects
23 Specific tariffs are collected as Fixed amount of money per unit traded a percentage of the price of the product A percentage of the quantity of imports All of the above
24 Ad valorem tariffs are collected as. Fixed amounts of money per unit traded A percentage of the price of the product A percentage of the quantity of imports All of the above
25 Which trade policy results in the government levying both a specific tariff and an advalorem tariff on imported goods. Compound tariff Nominals tariff Effective tariff Revenue tariff
26 A tax of 17 percent per imported item would be an example of a Ad valorem tariff Specific tariff effective tariff Compound tariff
27 A tax of 18 cents per unit of imported cheese would be an example of a. Compound tariff Effective tariff Ad valorem tariff Specific tariff
28 A product will be traded only if the pre trade price difference between the two countries Is less than the cost of transporting it between them is greater than the cost of transporting it between them Equals the cost of transporting it between them More information is needed to answer this question
29 According to the factor price equalization theorem, the ______ factor should oppose free trade policies in any given country. Abundant scarce Neither Can't tell without more information
30 The factor endowment theory was pioneered by Adam Smith David Richardo Wassily Leontief Ell Heckscher and Bartill Ohlim
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