Top 250+ Solved International Economics MCQ Questions Answer
Q. Free traders maintain that an open economy is advantageous in that it provides all of thefollowing except:
a. Increased competition for world producers
b. A wider selection of products for consumers
c. The utilization of the most efficient production methods
d. Relatively high wage levels for all domestic workers
Q. Recent pressures for protectionism in the United States have been motivated by all ofthe following except:
a. U.S. firms shipping component production overseas
b. High profit levels for American corporations
c. Sluggish rates of productivity growth in the United States
d. High unemployment rates among American workers
Q. A sudden shift from import tariffs to free trade may induce short-term unemploymentin:
a. Import-competing industries
b. Industries that are only exporters
c. Industries that sell domestically as well as export
d. Industries that neither import nor export
Q. Which of the following statements is correct?
a. In a customs union, member nations apply a uniform external tariff
b. in a free-trade area, member nations harmonize their monetary and fiscal policies
c. within a customs union there is unrestricted factor movement
d. a customs union is a higher form of economic integration than a common market
Q. A customs union that allows for the free movement of labor and capital among its member nations is called a:
a. preferential trade arrangement
b. free-trade area
c. common market
d. all of the above
Q. A trade-creating customs union is one where:
a. lower-cost imports from outside the customs union are replaced by higher-cost imports from a union member
b. some domestic production in a member nation is replaced by lower-cost imports from another member nation
c. trade among members increases but trade with nonmembers decreases
d. trade among members decreases while trade with nonmembers increases
Q. A trade-diverting customs union:
a. increases trade among union members and with nonmember nations
b. reduces trade among union members and with nonmember nations
c. increases trade among members but reduces trade with non-members
d. reduces trade among union members but increases it with nonmembers
Q. A trade-diverting customs union results in:
a. trade diversion only
b. trade creation only
c. both trade creation and trade diversion
d. we cannot say
Q. A trade-diverting customs union:
a. increases the welfare of member and nonmember nations
b. reduces the welfare of member and nonmember nations
c. increases the welfare of member nations but reduces that of nonmembers
d. reduces the welfare of nonmembers and may increase or reduce that of members
Q. A tariff:
a. Increases the volume of trade
b. Reduces the volume of trade
c. Has no effect on volume of trade
d. (a) and (c) of above
Q. A tariff is:
a. A restriction on the number of export firms
b. Limit on the amount of imported goods
c. Tax and imports
d. (b) and (c) of above
Q. What would encourage trade between two countries:
a. Different tax system
b. Frontier checks
c. National currencies
d. Reduced tariffs
Q. In a free trade world in which no restrictions exist, international trade will lead to:
a. Reduced real living standard
b. Decreased efficiency
c. Increased efficiency
d. Reduced real GDP
Q. Govt. policy about exports and imports is called:
a. Monetary policy
b. Fiscal policy
c. Commercial policy
d. Finance policy
Q. International trade and domestic trade differ because of:
a. Trade restrictions
b. Immobility of factors
c. Different government policies
d. All of the above