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