#1
Which of the following is a key characteristic of absolute advantage?
The ability to produce a good using fewer resources than another producer.
The ability to produce more units of a good compared to another producer.
The ability to produce goods at a lower opportunity cost than another producer.
The ability to produce goods with higher quality than another producer.
#2
What does the term 'comparative advantage' refer to in international trade?
The ability of a country to produce all goods more efficiently than other countries.
The ability of a country to produce a particular good at a lower opportunity cost than another country.
The ability of a country to produce a particular good using fewer resources than other countries.
The ability of a country to dominate global trade in a specific industry.
#3
Which organization is responsible for setting international trade rules and resolving trade disputes?
World Bank
International Monetary Fund (IMF)
World Trade Organization (WTO)
United Nations (UN)
#4
Which theory suggests that a country should specialize in producing goods for which it has the lowest opportunity cost?
Theory of absolute advantage
Theory of comparative advantage
Theory of opportunity cost
Theory of trade balance
#5
Which term describes the situation where a country exports more goods and services than it imports?
Trade balance
Trade surplus
Trade deficit
Balance of payments
#6
Which of the following is NOT a benefit of international trade?
Increased consumer choice
Economic specialization
Reduced competition
Economic growth
#7
Which of the following is NOT a goal of international trade?
Increasing economic growth
Enhancing international cooperation
Maximizing imports while minimizing exports
Improving living standards
#8
What is the main principle behind the theory of comparative advantage?
Countries should focus on producing goods that they can produce most efficiently relative to other goods.
Countries should specialize in the production of goods in which they have the absolute advantage.
Countries should produce goods for which they have the highest domestic demand.
Countries should aim to produce all goods domestically to avoid dependence on imports.
#9
What does the Purchasing Power Parity (PPP) theory suggest?
Exchange rates should adjust to ensure that identical goods cost the same in different countries.
Countries should rely on fixed exchange rates to stabilize international trade.
Governments should intervene to control inflation rates in different countries.
Countries should focus on promoting exports over imports to improve their balance of payments.
#10
What is the primary objective of imposing tariffs on imported goods?
To increase domestic production
To decrease government revenue
To encourage imports
To promote international cooperation
#11
What is the main purpose of the balance of payments (BoP) in international economics?
To track the flow of goods and services between countries
To monitor the balance between imports and exports of a country
To record all economic transactions between residents and non-residents of a country
To measure the exchange rate fluctuations
#12
Which of the following is a feature of a fixed exchange rate system?
Exchange rates are determined solely by market forces
Governments intervene to stabilize exchange rates
Exchange rates fluctuate freely based on supply and demand
Countries adopt a common currency
#13
What is the term used to describe the total value of a country's exports minus the total value of its imports?
Trade balance
Trade surplus
Trade deficit
Balance of payments
#14
What is the primary function of the International Monetary Fund (IMF)?
To promote free trade agreements
To provide loans and financial assistance to countries facing economic difficulties
To regulate exchange rates between currencies
To monitor global environmental policies
#15
What is the primary disadvantage of protectionist trade policies such as tariffs and quotas?
They lead to a more efficient allocation of resources
They promote fair competition in global markets
They can lead to retaliatory actions from trading partners
They encourage innovation and technological advancement