Top 250+ Solved International Economics MCQ Questions Answer
Q. The North American Free Trade Agreement
a. has reduced the usefulness of the gravity model.
b. has shown that international borders no longer affect the amount of trade between countries.
c. has reduced tariffs and other trade restrictions among British Columbia, Manitoba and Ontario.
d. has reduced tariffs and other trade restrictions among Canada, Mexico and the US.
Q. While technologies have reduced the negative effect that distance has on trade,
a. the effect of international borders has not been reduced through trade agreements.
b. the effects of the Internet and airplanes on trade have been negligible.
c. political factors have historically been more influential in determining the amount of trade than available technologies.
d. cultural clashes have recently reduced the amount of US trade compared to US trade in 1950.
Q. Most international trade today is classified as trade in
a. Agricultural products
b. Services
c. Manufactured products
d. Dairy products
Q. Outsourcing refers to the case in which
a. a firm exports out of a country rather than selling products within a country.
b. a firm imports into a country rather than buying products from within a domestic country.
c. consumers find out the source of where production occurs.
d. a firm moves part of its business operations out of the domestic country.
Q. Gross domestic product measures
a. the gross weight of products that are imported into a domestic country.
b. the gross weight of products that are exported from a domestic country.
c. the gross profits from all final goods and services produced in an economy.
d. the total value of all final goods and services produced within an economy.
Q. In the Ricardian model:
a. Trade will happen even if countries are identical.
b. Differences in factor endowments give rise to trade.
c. There is only one factor of production.
d. There is only one industry in each country.
Q. The Ricardian model exhibits gains from trade:
a. Only if each country has an absolute advantage in one of the industries.
b. For both trading countries.
c. Only for one of the trading countries.
d. Only if countries specialize completely.
Q. The opportunity cost of producing computers in terms of Web pages is 50 in Country A and is 10 in Country B. Based on the Ricardian model, what can we conclude about the pattern of trade?
a. Country A will export computers and import Web pages.
b. We need to know what the relative price of computers in terms of web pages is to answer this question.
c. We need to know what wages are to answer this question.
d. Country A will export Web pages and import computers.
Q. A(n) __________ is an example of a quota where foreigners hold quota licenses.
a. Export quota
b. Embargo
c. Auction quota
d. Tariff quota
Q. International dumping may involve
a. selling goods to foreigners at a price below that charged domestic consumers
b. selling goods to foreigners at a price below the cost of production
c. antidumping duties being levied on the imported, dumped goods
d. all of the above
Q. Nontariff trade barriers could include all of the following except
a. Domestic content laws
b. Government procurement policies
c. Health, safety, and environmental standards
d. Antidumping/countervailing duties applied to imports
Q. A production subsidy that is granted to a producer of an import-competing good
a. Does not require governmental taxes to finance it
b. Yields the same deadweight welfare loss as an import tariff or import quota
c. Has only a consumption effect deadweight loss
d. Has only a protective effect deadweight loss
Q. A tariff-rate quota is essentially a
a. Two-tier tariff applied to a country's imports
b. Three-tier tariff applied to a country's imports
c. Two-tier quota applied to a country's exports
d. Three-tier quota applied to a country's exports