#1
Which of the following is a basic principle of international trade?
Comparative Advantage
ExplanationCountries should specialize in what they are most efficient at producing.
#2
What is the meaning of the term 'Trade Surplus' in international trade?
When a country exports more goods than it imports
ExplanationExcess of exports over imports.
#3
What is the primary purpose of the 'Most Favored Nation' (MFN) status in international trade?
To ensure equal treatment for all trading partners
ExplanationEnsures fair treatment among trading partners.
#4
What is the primary purpose of the 'Doha Development Round' in the World Trade Organization (WTO)?
Addressing issues related to developing countries
ExplanationFocusing on development concerns in trade.
#5
What is the 'Infant Industry Argument' in the context of international trade?
An argument favoring protectionism to nurture emerging industries
ExplanationSupporting new industries through protectionism.
#6
What does the term 'Balance of Trade' refer to in international economics?
The total value of a country's exports minus its imports
ExplanationNet value of exports compared to imports.
#7
Which international trade theory argues that countries should specialize in the production of goods in which they have an absolute advantage?
Absolute Advantage Theory
ExplanationCountries should focus on goods they can produce with fewer resources.
#8
Which international organization is responsible for providing financial assistance to countries facing balance of payments problems?
International Monetary Fund (IMF)
ExplanationOffers aid to countries with payment imbalances.
#9
What is the 'Law of Comparative Advantage' in international trade?
Countries should produce what they are most efficient at producing
ExplanationNations should focus on what they do best.
#10
What is the 'Ricardian Model' in the context of international trade?
A theory of comparative advantage
ExplanationA model explaining comparative advantage.
#11
Which term refers to a situation where a country can produce a good with fewer resources than another country?
Absolute Advantage
ExplanationAbility to produce with fewer resources.
#12
What is the main goal of the World Trade Organization (WTO)?
Facilitating international trade negotiations
ExplanationTo aid in negotiations for smoother international trade.
#13
In the context of international trade, what does the term 'Dumping' refer to?
Selling goods in foreign markets at a price lower than the production cost
ExplanationSelling goods abroad at a loss to gain market share.
#14
In the context of international trade, what is 'Tariff'?
A tax imposed on imports and exports
ExplanationTax on goods traded internationally.
#15
According to the Heckscher-Ohlin Theory, what determines a country's comparative advantage in production?
Labor intensity of production
ExplanationThe intensity of labor in production affects advantage.
#16
What is the 'Trade-to-GDP Ratio' used to measure in the context of international economics?
Openness of an economy to international trade
ExplanationDegree of a nation's engagement in international trade.
#17
Which international trade theory emphasizes the role of factor endowments in determining comparative advantage?
Heckscher-Ohlin Theory
ExplanationFactor availability determines advantage.