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