#1
Which of the following is a benefit of international trade?
Increased competition
ExplanationEnhances competitiveness among businesses.
#2
What is a tariff?
A tax imposed on imports or exports
ExplanationA levy placed on goods crossing international borders.
#3
What is a trade deficit?
When a country imports more than it exports
ExplanationResults from an imbalance in trade flows.
#4
What is the Smoot-Hawley Tariff Act known for?
Increasing trade barriers during the Great Depression
ExplanationIntensified protectionist measures amid economic downturn.
#5
What is the 'dumping' of goods in the context of international trade?
Exporting goods at a price below their production cost
ExplanationUnderpricing goods in foreign markets.
#6
What does the term 'balance of trade' refer to?
The difference between imports and exports of a country
ExplanationIt measures the net value of a country's exports and imports.
#7
What is the main purpose of export management?
To increase export sales and profits
ExplanationFocuses on optimizing export operations for profitability.
#8
Which of the following trade theories suggests that a country should specialize in the production of goods and services that it can produce most efficiently?
Comparative advantage
ExplanationEmphasizes maximizing efficiency in production.
#9
Which organization is responsible for overseeing international trade agreements?
World Trade Organization (WTO)
ExplanationEnsures adherence to global trade rules and agreements.
#10
What is the purpose of Incoterms in international trade?
To define the responsibilities of buyers and sellers in shipping goods
ExplanationClarifies roles and obligations in international contracts.
#11
What is a 'letter of credit' in international trade?
A document issued by a bank guaranteeing payment to a seller
ExplanationProvides assurance of payment in international transactions.
#12
What is the significance of dumping in international trade?
It refers to the process of selling goods abroad at a lower price than the domestic market
ExplanationAffects domestic markets by undercutting prices.
#13
What is the 'most favored nation' status in international trade?
A principle of non-discrimination in trade policy
ExplanationEnsures equal trade treatment among nations.
#14
What is the purpose of a certificate of origin in international trade?
To indicate the country where the goods were produced
ExplanationConfirms the source nation of traded goods.
#15
What is a preferential trade agreement (PTA)?
An agreement that grants special trading privileges to certain countries
ExplanationProvides preferential treatment in trade to specific nations.