- 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) Gross Domestic Product
C) General Development Policy
D) Government Debt Portfolio
- 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) Northern Atlantic Financial Transactions Agreement
B) North American Free Trade Agreement
C) National Agricultural Fair Trade Association
D) Newly Adopted Financial Trading Act
- 4. Which country has the world's largest economy as of 2021?
A) Germany
B) China
C) Japan
D) United States
- 5. What is the main purpose of tariffs in international trade?
A) To protect domestic industries from foreign competition
B) To promote open and free trade
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) Mercantilism
C) Comparative Advantage Theory
D) Absolute Advantage Theory
- 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 promote international trade by reducing trade barriers
B) To enforce international labor standards
C) To regulate global currency exchange rates
D) To provide financial aid to developing countries
- 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) Heckscher-Ohlin Theory
B) Mercantilism
C) Linder Hypothesis
D) Factor Proportions 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) Managed exchange rate
B) Floating 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) Consumer Price Index (CPI)
B) Unemployment rate
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) Trade balance
B) Budget balance
C) Capital account balance
D) Current account balance
- 14. What does FDI stand for in the context of international economics?
A) Free Domestic Investment
B) Financial Disclosure Index
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) Opportunity Cost
B) Marginal Cost
C) Sunk Cost
D) Variable Cost
- 16. What is the term for a situation where the government intentionally lowers the value of its currency relative to foreign currencies?
A) Appreciation
B) Depreciation
C) Devaluation
D) Revaluation
- 17. Who is often referred to as the 'Father of Economics' and wrote 'The Wealth of Nations'?
A) Adam Smith
B) David Ricardo
C) John Maynard Keynes
D) Karl Marx
- 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) Trade surplus
B) Balance of trade
C) Current account balance
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) North American Free Trade Agreement (NAFTA)
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) John Maynard Keynes
C) Milton Friedman
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) Embargo
B) Subsidy
C) Tariff
D) Quota
- 23. Which entity issues a country's currency?
A) International Monetary Fund
B) Central Bank
C) Ministry of Finance
D) Treasury Department
- 24. Which country's currency is known as the yen?
A) Japan
B) South Korea
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) 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) Interest rate
B) Growth rate
C) Exchange 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) Free Trade
C) Comparative Advantage
D) Protectionism
- 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) 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) Russia
B) China
C) Brazil
D) France
- 32. What is the term for a good that is non-excludable and non-rivalrous in consumption?
A) Club Good
B) Public Good
C) Common Resource
D) Private Good
- 33. Which trade barrier is a government tax imposed on goods entering or leaving a country?
A) Subsidy
B) Embargo
C) Quota
D) Tariff
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) Maximizing trade deficits
B) Maintaining price stability and fostering economic growth
C) Achieving currency depreciation
D) Promoting speculative activities
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