Top 250+ Solved International Economics MCQ Questions Answer
Q. ------------theory states that countries which are rich in labour will export labour intensive goods and countries which are rich in capital will export capital intensivegoods
a. the heckscher ohlin theorem
b. stolper samuelson theorem
c. leontiff paradox
d. rybezensky theorem.
Q. Which among the following is NOT an assumption of H-O Theorem
a. there are two countries involved. each country has two factors (labour andcapital) and produce two commodities either labour intensively or capital intensively.
b. there is no perfect competition in both commodity and factor markets. all production functions are hertogenious. production function is subject to increasing or decreasing returns to scale.
c. there are no transportation costs.
d. factors are freely mobile within a country but immobile between countries.
Q. Which among the following is an assumption of H-O Theorem
a. each commodity that a nation produce differs in factor intensity. trade is free i.e. there are no trade restrictions in the form of tariffs or non-tariff barriers.
b. the production function remains the same in different countries for the same commodity. for e.g. if commodity a requires more capital in one country then same is the case in other country.
c. there is full employment of resources in both countries and demand is identical in both countries.
d. all the above
Q. The HO theory deals with which type of trade?
a. intra industry trade
b. trade based on economies of scale
c. trade based on imitation gaps and product cycles
d. inter industry tarde
Q. The basis for mutually advantageous trade in H O theory is
a. technology
b. factor endowments
c. economies of scale
d. tastes.
Q. Trade in differentiated products are also called
a. intra industry trade
b. trade based on economies of scale
c. trade based on imitation gaps and product cycles
d. inter industry tarde
Q. Which among the following are the major limitations of the H O theorem?
a. it explains only a part of the world trade as it ignores trade in differentiated products.
b. factor endowment is not the sole factor influencing commodity price and international trade.
c. the theory is empirically proved wrong in the case of u s economy.
d. all the above.
Q. _______________states that international trade will bring about equalization in the returns to homogeneous factors across countries, even without their physicalmovement.
a. theory of comparative advantage,
b. stolper-samuelson theorem,
c. rybczynski theorem, and
d. leontiff paradox.
Q. ____________states that at constant commodity prices, an increase in the quantity of one factor increases the production of the commodity intensive in this factor andreduces the output of the other commodity which is intensive in the constant factor.
a. theory of comparative advantage,
b. stolper-samuelson theorem,
c. rybczynski theorem, and
d. leontiff paradox.
Q. Net barter Terms of Trade is defined as
a. px/pm
b. g = qm/qx x 100
c. i = px/pm x qx
d. all the above
Q. The foreign exchange rate is NOT
a. the price of one currency expresses in terms of another.
b. rate at which of one commodity expresses in terms of another.
c. the value of one currency in terms of another
d. fixed for ever.
Q. ______________means the measures adopted for avoiding risks.
a. hedging
b. speculation
c. arbitrage
d. non of the above
Q. _________________ is an open position in the market with an expectation of gainsthrough the fluctuations.
a. hedging
b. speculation
c. arbitrage
d. non of the above
Q. Under a fixed exchange rate system, ____________________are official changes inthe value of a country's currency relative to other currencies.
a. devaluation
b. depreciation and appreciation
c. revaluation
d. both a and c.
Q. __________ is the deliberate downward adjustment in the official exchange rate,reduces the currency's value.
a. devaluation
b. depreciation
c. revaluation
d. appreciation. 56. a _______________is an upward adjustment in the official exchange rate, which