Fundamentals of International Trade Quiz
Explore fundamentals of international trade with this quiz. Learn about comparative advantage, trade barriers, WTO, and more!
#1
Which of the following is an advantage of international trade?
Increased competition leading to lower prices
Decreased variety of goods and services
Reduced economic growth
Limited access to resources
#2
Which international organization facilitates global trade by negotiating and implementing trade agreements?
United Nations (UN)
International Monetary Fund (IMF)
World Trade Organization (WTO)
World Bank
#3
What is a trade deficit?
When a country's exports exceed its imports
When a country's imports exceed its exports
When a country has a surplus in its current account
When a country's currency appreciates
#4
What is the main purpose of a trade embargo?
To increase trade between nations
To promote diplomatic relations
To restrict or prohibit trade with a particular country
To encourage globalization
#5
What is the term for a tax imposed on imported goods?
Subsidy
Tariff
Quota
Dumping
#6
What does 'comparative advantage' refer to in international trade?
A country's ability to produce a good or service at a lower opportunity cost than another country
The total output a country can produce
A country's ability to produce all goods and services efficiently
The ability of a country to produce more than it consumes
#7
Which of the following is NOT a barrier to international trade?
Tariffs
Quotas
Subsidies
Free trade agreements
#8
What is the balance of trade?
The difference between a country's imports and exports of goods and services
The total value of a country's exports
The total value of a country's imports
The difference between a country's savings and investments
#9
Which economic theory advocates for minimal government intervention in international trade?
Mercantilism
Keynesian economics
Protectionism
Free trade liberalism
#10
What is a trade barrier?
A government restriction that impedes trade
A tax levied on imports or exports
An international trade agreement
A type of currency exchange mechanism
#11
What does the term 'dumping' refer to in international trade?
Selling goods in a foreign market below their cost of production
Recycling waste materials
Selling goods at a high price
Trading goods between countries with similar economies
#12
What is the Smoot-Hawley Tariff Act known for?
Initiating free trade agreements
Imposing high tariffs leading to a decline in international trade during the Great Depression
Establishing the World Trade Organization
Promoting globalization
#13
What is the 'most favored nation' principle in international trade?
A country giving preferential treatment to certain trading partners
A policy of imposing tariffs on all imported goods
A system of preferential trade agreements
A commitment to treat all trading partners equally
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