Top 250+ Solved International Economics MCQ Questions Answer
Q. If Japan and Pakistan start free trade, difference in wages in two countries will:
a. Increase
b. Decrease
c. No effect
d. Double
Q. According to Hecksher and Ohlin basic cause of international trade is:
a. Difference in factor endowments
b. Difference in markets
c. Difference in political systems
d. Difference in ideology
Q. All are advantages of foreign trade EXCEPT:
a. People get foreign exchange
b. Nations compete
c. Cheaper goods
d. Optimum utilisation of country's resources
Q. A primary reason why nations conduct international trade is because:
a. Some nations prefer to produce one thing while others produce another
b. Resources are not equally distributed to all trading nations
c. Trade enhances opportunities to accumulate profits
d. Interest rates are not identical in all trading nations
Q. A main advantage of specialization results from:
a. Economics of large scale production
b. The specializing country behaving as a monopoly
c. Smaller production runs resulting in lower unit costs.
d. High wages paid to foreign workers
Q. International trade in goods and services is sometimes used as a substitute for all of the following except:
a. International movements of capital.
b. International movements of labor.
c. International movements of technology
d. Domestic production of different goods and services
Q. If a nation has an open economy it means that the nation:
a. Allows private ownership of capital.
b. Has flexible exchange rates
c. Has fixed exchange rates
d. Conducts trade with other countries
Q. International trade forces domestic firms to become more competitive in terms of:
a. The introduction of new products
b. Product design and quality
c. Product price
d. All of the above
Q. The movement to free international trade is most likely to generate short-term unemployment in which industries:
a. Industries in which there are neither imports nor exports
b. Import-competing industries.
c. Industries that sell to domestic and foreign buyers
d. Industries that sell to only foreign buyers
Q. International trade is based on the idea that:
a. Exports should exceed imports
b. Imports should exceed exports
c. Resources are more mobile internationally than are goods
d. Resources are less mobile internationally than are goods
Q. Arguments for free trade are sometimes disregarded by politicians because:
a. Maximizing domestic efficiency is not considered important
b. Maximizing consumer welfare may not be a chief priority
c. There exist sound economic reasons for keeping one’s economy isolated from other economies.
d. Economists tend to favor highly protected domestic markets
Q. Increased foreign competition tend to
a. Intensify inflationary pressure at home
b. Induce falling output per worker-hour for domestic workers
c. Place constraints on the wages of domestic workers
d. Increase profits of domestic import-competing industrie
Q. Free trade is based on the principle of:
a. Comparative advantage
b. Comparative scale
c. Economies of advantage
d. Production possibility advantage
Q. In 2003, the US had the largest total amount of imports from and exports to
a. Chin
b. Mexico.
c. Canada.
d. Germany.
Q. Evidence shows that
a. the effect of borders is not important when comparing international trade with trade between regions within a country.
b. the amount of trade that a country undertakes is not related to its geography.
c. the amount of trade between countries is not related to the cultural affinity between the countries.
d. countries farther apart have less trade between them on average.