- 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) World Bank
B) International Monetary Fund (IMF)
C) United Nations (UN)
D) World Trade Organization (WTO)
- 3. What does NAFTA stand for?
A) Newly Adopted Financial Trading Act
B) North American Free Trade Agreement
C) National Agricultural Fair Trade Association
D) Northern Atlantic Financial Transactions Agreement
- 4. Which country has the world's largest economy as of 2021?
A) China
B) United States
C) Japan
D) Germany
- 5. What is the main purpose of tariffs in international trade?
A) To increase overall consumer welfare
B) To promote open and free trade
C) To protect domestic industries from foreign competition
D) To encourage foreign investment
- 6. Which theory suggests that countries should specialize in producing goods where they have a comparative advantage?
A) Mercantilism
B) Absolute Advantage Theory
C) Comparative Advantage Theory
D) Ricardian Equivalence
- 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) Regulating global trade agreements
D) Controlling currency exchange 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 promote international trade by reducing trade barriers
C) To enforce international labor standards
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) Absolute advantage
B) Specialization benefit
C) Opportunity cost advantage
D) Comparative advantage
- 10. Which trade theory suggests that countries should produce and export goods that require resources they have in abundance?
A) Mercantilism
B) Heckscher-Ohlin Theory
C) Factor Proportions Theory
D) Linder Hypothesis
- 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) Managed exchange rate
C) Fixed exchange rate
D) Floating 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) 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) Capital account balance
B) Budget balance
C) Trade balance
D) Current account balance
- 14. What does FDI stand for in the context of international economics?
A) Free Domestic Investment
B) Foreign Development Initiative
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) Opportunity Cost
B) Sunk Cost
C) Variable 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) Appreciation
B) Revaluation
C) Devaluation
D) Depreciation
- 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) Adam Smith
D) Karl Marx
- 18. What is the term for a situation where a single company dominates an entire industry?
A) Cartel
B) Monopoly
C) Oligopoly
D) Duopoly
- 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) Trade surplus
C) Current account balance
D) Capital account balance
- 20. Which agreement aims to promote economic cooperation and regional integration among European countries?
A) Organization of the Petroleum Exporting Countries (OPEC)
B) Association of Southeast Asian Nations (ASEAN)
C) North American Free Trade Agreement (NAFTA)
D) European Union (EU)
- 21. Who developed the 'Laffer Curve' which illustrates the relationship between tax rates and tax revenue?
A) Milton Friedman
B) Paul Krugman
C) Arthur Laffer
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) Embargo
B) Tariff
C) Subsidy
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) Japan
B) China
C) South Korea
D) India
- 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) North American Free Trade Agreement (NAFTA)
C) Trans-Pacific Partnership (TPP)
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) Interest rate
C) Exchange rate
D) Growth 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) Free Trade
B) Protectionism
C) Comparative Advantage
D) Specialization
- 28. What type of trade occurs when a country exports more goods than it imports?
A) Trade deficit
B) Current account surplus
C) Balance of trade
D) Trade surplus
- 29. Which country had the world's second-largest economy as of 2021?
A) China
B) Japan
C) India
D) Germany
- 30. What is the economic theory that suggests government spending and tax cuts can stimulate economic growth?
A) Supply-Side Economics
B) Austrian School Economics
C) Monetarism
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) France
C) Brazil
D) China
- 32. What is the term for a good that is non-excludable and non-rivalrous in consumption?
A) Public Good
B) Club Good
C) Common Resource
D) Private Good
- 33. Which trade barrier is a government tax imposed on goods entering or leaving a country?
A) Embargo
B) Quota
C) Subsidy
D) Tariff
A) A tax imposed on imported goods
B) A specific quota on exports
C) A trade agreement between nations
D) A financial aid package for exporters
- 35. What is the primary goal of exchange rate policy?
A) Achieving currency depreciation
B) Maintaining price stability and fostering economic growth
C) Promoting speculative activities
D) Maximizing trade deficits
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