#1
Which of the following is a characteristic of a command economy?
Centralized government control
ExplanationGovernment dictates economic decisions.
#2
Which economic system is primarily based on supply and demand?
Capitalism
ExplanationPrices and production are determined by market forces.
#3
Which economic system is characterized by the absence of government intervention?
Market economy
ExplanationMinimal government involvement in economic affairs.
#4
What is a trade deficit?
When a country's imports exceed its exports
ExplanationNegative balance in trade value.
#5
Which organization provides financial assistance and stability to countries experiencing economic crises?
International Monetary Fund (IMF)
ExplanationSupports monetary cooperation and stability.
#6
What is protectionism?
A policy of restricting imports through tariffs and quotas
ExplanationShielding domestic industries from foreign competition.
#7
What is a free trade agreement (FTA)?
An agreement to reduce or eliminate trade barriers between participating countries
ExplanationPromotes free flow of goods and services.
#8
Which economic theory suggests that government spending should be used to stimulate demand during economic downturns?
Keynesian economics
ExplanationDemand-side intervention for economic stability.
#9
Which of the following is a characteristic of a market economy?
Private ownership of the means of production
ExplanationIndividuals control resources and production.
#10
The 'invisible hand' concept is associated with which economist?
Adam Smith
ExplanationMarket self-regulation without central intervention.
#11
Which organization oversees international trade agreements?
World Trade Organization (WTO)
ExplanationPromotes global trade rules and resolves disputes.
#12
Which economic system advocates for the abolition of private property and a classless society?
Communism
ExplanationPublic ownership of means of production.
#13
What is comparative advantage in international trade?
When a country specializes in producing goods it can produce most efficiently
ExplanationEfficiency in resource allocation for trade benefit.
#14
Which international trade theory suggests that countries should specialize in producing goods they can produce most efficiently?
Theory of Comparative Advantage
ExplanationEfficiency-driven trade strategy.
#15
What is a quota in international trade?
A limit on the quantity of a good that can be imported or exported
ExplanationQuantity restriction on trade goods.
#16
Which economic system advocates for both private ownership of the means of production and government intervention in the economy?
Mixed economy
ExplanationBlend of market and planned economies.
#17
What is dumping in the context of international trade?
Selling goods in a foreign market at a price below production cost
ExplanationUnfair trade practice to gain market share.
#18
Which international trade theory suggests that countries will export goods that intensively use factors of production they have in abundance?
Heckscher-Ohlin Theory
ExplanationFactor endowment-driven trade.
#19
What is the primary objective of a trade embargo?
To limit the importation of certain goods from specific countries
ExplanationPunitive measure against specific nations.
#20
Which organization is responsible for issuing a country's currency?
Central bank
ExplanationControls monetary policy and currency issuance.
#21
What is the primary purpose of foreign direct investment (FDI)?
To acquire ownership in a foreign company
ExplanationInvestment in foreign enterprises for control or profit.
#22
What is a tariff?
A tax on imports or exports
ExplanationImposed to restrict trade or raise revenue.
#23
The 'Laffer curve' is associated with which economic concept?
Supply-side economics
ExplanationTax rates and revenue relationship.
#24
What is the main function of the General Agreement on Tariffs and Trade (GATT)?
To negotiate and reduce tariffs
ExplanationPromotes international trade liberalization.
#25
Which economic theory advocates for minimal government intervention in the economy?
Austrian economics
ExplanationEmphasizes laissez-faire and free markets.