Top 250+ Solved International Economics MCQ Questions Answer
Q. “Free trade between two countries in H O model will equalize relative factor pricesprovided there is incomplete specialization.” This is
a. the factor price equalization theorem
b. rybezinsky theorem
c. leontiff paradox
d. cascading effect
Q. The absolute slope of a concave PPC is given by
a. internal equilibrium price ratio
b. the marginal rate of transformation
c. increasing returns to scale
d. all the above
Q. If { } > { } when K= capital and L= labour, Pk is price of capital and Pl is priceof labour and A and B are countries then
a. counry a is labour abundant
b. counry a is capital abundant
c. counry b is labour abundant
d. counry b is capital abundant
Q. Devaluation works best when
a. it is accompanied by a decline in short term interest rate
b. foreign demad for exports is is elastic
c. demand for forign imports is inelastic
d. non of the above
Q. international trade refers to trade between
a. two regions of a country
b. two countries
c. two commodities produced in different countries
d. non of the above
Q. The trade theory that states that nations should accumulate financial wealth, usuallyin the form of gold, by encouraging exports and discouraging imports is called
a. keynesianism
b. individualism
c. socialism
d. mercantilism.
Q. Which among the following are the central themes of Mercantilism?
a. export or perish.
b. strict focus on the wealth accumulation through protectionism.
c. no simultaneous gains or sharing of gains among countries are possible. one country can benefit only at the cost of other countries.
d. all the above.
Q. “An Enquiry in to the nature and causes of Wealth of Nations” is written by
a. j s mill
b. david recardo
c. karl marx
d. non of the above
Q. Adam Smith identified the basic reason for trade between two nations as
a. the difference in absolute advantage
b. the difference in comparative advantage
c. difference in factor endowments
d. non of the above.
Q. Which of the following would call for inpayments to the United States?
a. American imports of German steel
b. Gold flowing out of the United States
c. American unilateral transfers to less-developed countries
d. American firms selling insurance to British shipping companies
Q. In a country’s balance of payments, which of the following transactions are debits?
a. Domestic bank balances owned by foreigners are decreased
b. Foreign bank balances owned by domestic residents are decreased
c. Assets owned by domestic residents are sold to nonresidents
d. Securities are sold by domestic residents to nonresidents
Q. Which of the following is classified as a credit in the U.S. balance of payments?
a. U.S. exports
b. U.S. gifts to other countries
c. A flow of gold out of the U.S.
d. Foreign loans made by U.S. companies
Q. What is "immiserizing growth"?
a. Export-biased growth that worsens terms of trade so that a country is worse off as a result.
b. The specialization of low-income countries in production of low-wage products.
c. Trade that hurts the poorest group of people.
d. Improvement in a country's terms of trade at the expense of other countries.
Q. What is the "transfer problem"?
a. The fact that international transfers affect terms of trade when they are not taken into account.
b. Rich countries do not transfer a sufficient amount of money to poor countries.
c. Negative effects on a country that transfers money to others.
d. The severe indebtedness of some low-income countries.