- 1. International economics is the study of how economic interactions among countries influence global trade and productivity. It involves analyzing the impact of policies, exchange rates, and trade agreements on the movement of goods and services across borders. International economics also considers the distribution of income and wealth on a global scale, as well as the implications of migration and capital flows. By understanding the complexities of international economic relationships, policymakers and businesses can make informed decisions to promote sustainable growth and development.
What does GDP stand for?
A) General Development Policy
B) Gross Domestic Product
C) Global Demand Projection
D) Government Debt Portfolio
- 2. Which organization is responsible for overseeing the global financial system?
A) International Monetary Fund (IMF)
B) United Nations (UN)
C) World Trade Organization (WTO)
D) World Bank
- 3. What does NAFTA stand for?
A) Northern Atlantic Financial Transactions Agreement
B) National Agricultural Fair Trade Association
C) North American Free Trade Agreement
D) Newly Adopted Financial Trading Act
- 4. Which country has the world's largest economy as of 2021?
A) China
B) Germany
C) United States
D) Japan
- 5. What is the main purpose of tariffs in international trade?
A) To increase overall consumer welfare
B) To encourage foreign investment
C) To promote open and free trade
D) To protect domestic industries from foreign competition
- 6. Which theory suggests that countries should specialize in producing goods where they have a comparative advantage?
A) Ricardian Equivalence
B) Comparative Advantage Theory
C) Absolute Advantage Theory
D) Mercantilism
- 7. What is the role of the World Bank in the international economy?
A) Regulating global trade agreements
B) Setting international interest rates
C) Providing financial and technical assistance to developing countries
D) Controlling currency exchange rates
- 8. What is the main goal of the General Agreement on Tariffs and Trade (GATT)?
A) To regulate global currency exchange rates
B) To provide financial aid to developing countries
C) To promote international trade by reducing trade barriers
D) To enforce international labor standards
- 9. What is the term for a situation where a country can produce a good at a lower opportunity cost than another country?
A) Specialization benefit
B) Comparative advantage
C) Absolute advantage
D) Opportunity cost advantage
- 10. Which trade theory suggests that countries should produce and export goods that require resources they have in abundance?
A) Linder Hypothesis
B) Mercantilism
C) Factor Proportions Theory
D) Heckscher-Ohlin Theory
- 11. Which exchange rate system allows the value of a country's currency to be determined by supply and demand in the foreign exchange market?
A) Pegged exchange rate
B) Floating exchange rate
C) Fixed exchange rate
D) Managed exchange rate
- 12. What is the most common measure of a country's level of economic output?
A) Consumer Price Index (CPI)
B) Balance of trade
C) Gross Domestic Product (GDP)
D) Unemployment rate
- 13. What is the term for the total value of a country's exports minus the total value of its imports?
A) Current account balance
B) Trade balance
C) Capital account balance
D) Budget balance
- 14. What does FDI stand for in the context of international economics?
A) Foreign Direct Investment
B) Foreign Development Initiative
C) Financial Disclosure Index
D) Free Domestic Investment
- 15. What is the economic term for the value of the next best alternative foregone in making a decision?
A) Sunk Cost
B) Variable Cost
C) Marginal Cost
D) Opportunity Cost
- 16. What is the term for a situation where the government intentionally lowers the value of its currency relative to foreign currencies?
A) Devaluation
B) Revaluation
C) Appreciation
D) Depreciation
- 17. Who is often referred to as the 'Father of Economics' and wrote 'The Wealth of Nations'?
A) Adam Smith
B) John Maynard Keynes
C) Karl Marx
D) David Ricardo
- 18. What is the term for a situation where a single company dominates an entire industry?
A) Monopoly
B) Cartel
C) Duopoly
D) Oligopoly
- 19. What is the term for the total value of a country's exports and imports of goods and services?
A) Balance of trade
B) Capital account balance
C) Current account balance
D) Trade surplus
- 20. Which agreement aims to promote economic cooperation and regional integration among European countries?
A) European Union (EU)
B) Association of Southeast Asian Nations (ASEAN)
C) North American Free Trade Agreement (NAFTA)
D) Organization of the Petroleum Exporting Countries (OPEC)
- 21. Who developed the 'Laffer Curve' which illustrates the relationship between tax rates and tax revenue?
A) Paul Krugman
B) John Maynard Keynes
C) Milton Friedman
D) Arthur Laffer
- 22. What type of trade barrier imposes a limit on the quantity of a good that can be imported into a country?
A) Tariff
B) Subsidy
C) Embargo
D) Quota
- 23. Which entity issues a country's currency?
A) Treasury Department
B) International Monetary Fund
C) Ministry of Finance
D) Central Bank
- 24. Which country's currency is known as the yen?
A) South Korea
B) India
C) China
D) Japan
- 25. Which agreement is a trade pact among 11 Pacific Rim countries that aims to promote economic cooperation and reduce trade barriers?
A) European Union (EU)
B) Trans-Pacific Partnership (TPP)
C) North American Free Trade Agreement (NAFTA)
D) Association of Southeast Asian Nations (ASEAN)
- 26. What is the term for the price of one currency in terms of another currency?
A) Inflation rate
B) Growth rate
C) Exchange rate
D) Interest rate
- 27. What is the term for a situation in which a country restricts trade with other countries by imposing tariffs, quotas, or other barriers?
A) Protectionism
B) Free Trade
C) Comparative Advantage
D) Specialization
- 28. What type of trade occurs when a country exports more goods than it imports?
A) Balance of trade
B) Trade deficit
C) Trade surplus
D) Current account surplus
- 29. Which country had the world's second-largest economy as of 2021?
A) Japan
B) China
C) India
D) Germany
- 30. What is the economic theory that suggests government spending and tax cuts can stimulate economic growth?
A) Keynesian Economics
B) Monetarism
C) Austrian School Economics
D) Supply-Side Economics
- 31. Which country is known to have a comparative advantage in producing wine due to its climate and soil conditions?
A) China
B) France
C) Brazil
D) Russia
- 32. What is the term for a good that is non-excludable and non-rivalrous in consumption?
A) Private Good
B) Public Good
C) Common Resource
D) Club Good
- 33. Which trade barrier is a government tax imposed on goods entering or leaving a country?
A) Embargo
B) Subsidy
C) Tariff
D) Quota
A) A financial aid package for exporters
B) A tax imposed on imported goods
C) A trade agreement between nations
D) A specific quota on exports
- 35. What is the primary goal of exchange rate policy?
A) Maximizing trade deficits
B) Promoting speculative activities
C) Maintaining price stability and fostering economic growth
D) Achieving currency depreciation
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