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