Practice Test

Q1) Which of the following best describes international trade? Show Answer

Q2) What is a trade deficit? Show Answer

Q3) Which of the following is an example of a trade barrier? Show Answer

Q4) What does the term "comparative advantage" mean in international trade? Show Answer

Q5) Which organization facilitates international trade negotiations and dispute resolutions among its member countries? Show Answer

Q6) Which of the following does not represent a difference between internal trade and international trades? Show Answer

Q7) The theory of absolute advantage states that Show Answer

Q8) Which of the following theories advocates that countries should produce those goods for which it has the greatest relative advantage? Show Answer

Q9) Which of the following holds that a country can increase its wealth by encouraging exports and discouraging imports? Show Answer

Q10) According to the theory of comparative advantage Show Answer

Q11) Comparative advantage refers to Show Answer

Q12) Ricardo explained the law of comparative advantage on the basis of Show Answer

Q13) Which theory of international trade suggests that a country should specialize in producing and exporting goods that it can produce more efficiently than other countries? Show Answer

Q14) According to the Heckscher-Ohlin theory, international trade is primarily driven by differences in which of the following factors? Show Answer

Q15) The theory of absolute advantage was proposed by: Show Answer

Q16) Which theory of international trade emphasizes the role of economies of scale and product differentiation in explaining trade patterns? Show Answer

Q17) The theory of mercantilism suggests that a country's wealth is determined by: Show Answer

Q18) A specific tariff is Show Answer

Q19) A tariff on imports is beneficial to domestic producers of the imported good because Show Answer

Q20) A tax applied as a percentage of the value of an imported good is known as Show Answer

Q21) Escalated tariff refers to Show Answer

Q22) Voluntary export restraints involve: Show Answer

Q23) Anti-dumping duties are Show Answer

Q24) A countervailing duty is Show Answer

Q25) Which of the following is an outcome of tariff? Show Answer

Q26) SPS measures and TBTs are Show Answer

Q27) Which of the following is not a non-tariff barrier? Show Answer

Q28) Under tariff rate quota Show Answer

Q29) Non-tariff barriers (NTBs) include all of the following except: Show Answer

Q30) Which of the following is an example of a trade barrier that restricts imports by imposing additional charges on imported goods? Show Answer

Q31) What is the primary goal of protectionist trade policies? Show Answer

Q32) Which trade policy allows a government to completely ban the import or export of certain goods and services? Show Answer

Q33) What does the term "dumping" refer to in trade policy? Show Answer

Q34) Which trade policy encourages the unrestricted flow of goods and services between countries without any trade barriers? Show Answer

Q35) What is the purpose of an export subsidy in trade policy? Show Answer

Q36) Which trade policy tool is used to restrict the quantity of a specific imported product? Show Answer

Q37) What does the term "trade liberalization" mean in the context of trade policy? Show Answer

Q38) Which organization oversees and regulates international trade policies and dispute resolutions among member countries? Show Answer

Q39) Which trade policy is designed to support domestic industries by providing financial assistance to help them compete with foreign producers? Show Answer

Q40) What does GATT stand for? Show Answer

Q41) When was GATT established? Show Answer

Q42) What was the main objective of GATT? Show Answer

Q43) Which organization succeeded GATT in 1995 and took over its functions? Show Answer

Q44) Under GATT, which round of negotiations, held in 1986-1994, led to significant reductions in tariffs and the creation of the WTO? Show Answer

Q45) Which of the following culminated in the establishment of the World Trade Organization? Show Answer

Q46) Choose the correct statement Show Answer

Q47) The 'National treatment' principle stands for Show Answer

Q48) 'Bound tariff' refers to Show Answer

Q49) The essence of 'MFN principle' is Show Answer

Q50) The World Trade Organization (WTO) Show Answer

Q51) The Agreement on Agriculture includes explicit and binding commitments made by WTO Member governments Show Answer

Q52) The Agreement on Textiles and Clothing Show Answer

Q53) The Agreement on Trade-Related Aspects of Intellectual Property Rights Show Answer

Q54) The most controversial topic in the yet to conclude Doha Agenda is Show Answer

Q55) The WTO commitments Show Answer

Q56) Which of the following best describes Foreign Direct Investment (FDI)? Show Answer

Q57) What is the main difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)? Show Answer

Q58) Which of the following is an example of Foreign Portfolio Investment (FPI)? Show Answer

Q59) Which type of investment is more volatile and can quickly move in and out of a country's financial markets? Show Answer

Q60) What is the primary purpose of Foreign Direct Investment (FDI)? Show Answer

Q61) Based on the supply and demand model of determination of exchange rate, which of the following ought to cause the domestic currency of Country X to appreciate against dollar? Show Answer

Q62) All else equal, which of the following is true if consumers of India develop taste for imported commodities and decide to buy more from the US? Show Answer

Q63) The nominal exchange rate is expressed in units of one currency per unit of the other currency. A real exchange rate adjusts this for changes in price levels'. The statements are Show Answer

Q64) Choose the correct statement. Show Answer

Q65) Which of the following statements is true? Show Answer

Q66) An increase in the supply of foreign exchange Show Answer

Q67) Currency devaluation Show Answer

Q68) At any point of time, all markets tend to have the same exchange rate for a given currency due to Show Answer

Q69) 'Vehicle Currency' refers to Show Answer

Q70) Which of the following statements is incorrect? Show Answer

Q71) Which of the following is a component of foreign capital? Show Answer

Q72) Which of the following would be an example of foreign direct investment from Country X? Show Answer

Q73) Which of the following types of FDI includes creation of fresh assets and production facilities in the host country? Show Answer

Q74) Which is the leading country in respect of inflow of FDI to India? Show Answer

Q75) An argument in favour of direct foreign investment is that it tends to Show Answer

Q76) Which of the following is a reason for foreign direct investment? Show Answer

Q77) A foreign direct investor Show Answer

Q78) Foreign investments are prohibited in Show Answer

Q79) Which of the following statement is false in respect of FPI? Show Answer

Q80) What does the exchange rate represent? Show Answer

Q81) What type of exchange rate system allows the exchange rate to be determined by market forces of supply and demand? Show Answer

Q82) In a floating exchange rate system, how are exchange rates determined? Show Answer

Q83) If the exchange rate between the US dollar (USD) and the Euro (EUR) changes from 1 USD = 0.85 EUR to 1 USD = 0.80 EUR, how has the USD appreciated or depreciated against the Euro? Show Answer

Q84) Which of the following statements is true regarding a fixed exchange rate system? Show Answer