#1
Which of the following organizations is responsible for setting international trade rules?
World Trade Organization
ExplanationWTO sets and enforces rules for global trade to ensure fair and predictable international commerce.
#2
What does GDP stand for?
Gross Domestic Product
ExplanationGDP is the total value of goods and services produced within a country's borders, serving as a key economic indicator.
#3
What does FDI stand for in the context of international economics?
Foreign Direct Investment
ExplanationFDI involves investments in a foreign country, establishing control and fostering economic relationships.
#4
What is the main goal of the International Monetary Fund (IMF)?
Providing loans to member countries facing financial difficulties
ExplanationIMF aims to stabilize global economies by providing financial assistance to member countries in need.
#5
Which economic indicator measures the total value of goods and services produced within a country's borders in a specific period?
Gross Domestic Product (GDP)
ExplanationGDP serves as a comprehensive measure of a country's economic activity, encompassing goods and services.
#6
Which international economic organization provides financial assistance and technical support to developing countries?
World Bank
ExplanationThe World Bank supports economic development by providing financial aid and technical assistance to developing nations.
#7
Which economic theory emphasizes the importance of government intervention in international trade?
Mercantilism
ExplanationMercantilism advocates for government involvement to maximize a nation's wealth through trade.
#8
What is the term used to describe a situation where a country exports more than it imports?
Trade surplus
ExplanationA trade surplus occurs when a country's exports exceed its imports, indicating a positive balance.
#9
What is the concept of comparative advantage in international trade?
A country focuses on producing goods it can produce most efficiently relative to other countries
ExplanationCountries gain from specializing in goods they can efficiently produce, as per the principle of comparative advantage.
#10
Which of the following is NOT a component of the balance of payments?
Trade account
ExplanationWhile the balance of payments includes various accounts, the 'Trade account' is not one of them.
#11
Which trade theory suggests that a country should specialize in producing goods it can produce most efficiently relative to other countries?
Absolute advantage
ExplanationAbsolute advantage theory recommends specializing in producing goods where a country has the highest efficiency.
#12
What is the purpose of tariffs in international trade?
To raise government revenue
ExplanationTariffs are taxes on imported goods, primarily imposed to generate revenue for the government.
#13
Which currency is used as the primary reserve currency in the world?
US Dollar
ExplanationThe US Dollar is the primary reserve currency, widely used in international transactions and held by central banks.
#14
Which term describes a situation where a country deliberately sells goods below market price in another country to gain market share or drive competitors out of business?
Dumping
ExplanationDumping involves selling goods at unfairly low prices to gain a competitive advantage and harm competitors.
#15
What is the term used to describe a situation where a country intentionally manipulates its currency exchange rate to gain an unfair advantage in international trade?
Currency manipulation
ExplanationCurrency manipulation involves deliberate actions to alter a currency's exchange rate, seeking unfair advantages in trade.