Top 250+ Solved International Economics MCQ Questions Answer
Q. Perfect international capital mobility suggests that international funds will be responsive to _____________ differentials
a. current account
b. interest rate
c. tax
d. price
Q. When capital mobility is perfect, interest rate differentials will tend to be offset by ________
a. price differences
b. balance of payments differences
c. current account differences
d. expected exchange rate changes
Q. Theory of Absolute advantage is
a. a rejoinder of merchantalism
b. a corollary of merchantalism
c. critique of merchantalism
d. non of the above.
Q. The Absolute advantage theory indicates that a country should engage in theproduction and exchange of those commodities where it has
a. a comparative advantage
b. an absolute advantage
c. relative factor endowment
d. greater opportunity cost.
Q. The ability to produce more of a good or service than competitors, using the sameamount of resources is
a. a comparative advantage
b. an absolute advantage
c. relative factor endowment
d. greater opportunity cost.
Q. Which among the following are the major assumptions of Absolute advantagetheory?
a. there are two countries and two commodities and one country has absolute advantage in one commodity and the second country has advantage in another commodity.
b. labour is the only factor of production and labour is homogeneous, that means each unit of labour produces same level of output. value of a commodity is measured in terms of its labour content
c. labour is perfectly mobile within the country but perfectly immobile between the countries. it means that workers are free to move between industries within the nation but migration to other countries is impossible.
d. all the above.
Q. Absolute advantage theory assumes
a. no technological change.
b. no transportation cost
c. labour theory of value
d. all the above
Q. The principle of comparative advantage was first introduced by
a. david ricardo
b. j s mill
c. adam smith
d. karl marx
Q. The ability of a firm or individual to produce goods and/or services at a loweropportunity cost than other firms or individuals.
a. absolute advantage
b. opportunity cost
c. comparative advantage
d. non of the above.
Q. Major assumptions of the theory of Comparitive advantage are
a. there are two countries and two commodities and the countries have absolute advantage in both commodities .
b. labour is the only factor of production and labour is homogeneous, that means each unit of labour produces same level of output. value of a commodity is measured in terms of its labour content
c. labour is perfectly mobile within the country but perfectly immobile between the countries. it means that workers are free to move between industries within the nation but migration to other countries is impossible.
d. all the above.
Q. The ‘Reciprocal Demand Theory’ in International Trade can be attributed to
a. adam smith
b. david recardo
c. j s mill
d. karl marx
Q. The curve that shows howmuch of its import commodity a nation requires inexchange for various quantities of its export commodity is
a. demand curve
b. laffer curve
c. phillips curev
d. offer curev
Q. Reciprocal Demand Curve is another name for
a. demand curve
b. laffer curve
c. phillips curev
d. offer curev
Q. The Reciprocal Demand theory was put into graphic form by
a. adam smith
b. david recardo
c. alfred marshall and f.y. edgeworth
d. non of the above
Q. The amount of commodity a nation is willing to give up to get an additional unit ofanother commodity and still remain on the same indifference curve is known as
a. marginal rate of substitution
b. marginal rate of transformation
c. marginal product
d. non of the above