#1
Which organization facilitates international monetary cooperation and exchange rate stability?
International Monetary Fund (IMF)
ExplanationIMF facilitates global monetary cooperation and stability.
#2
What does GDP stand for in the context of international economics?
Gross Domestic Product
ExplanationGDP represents the total value of goods and services produced within a country's borders.
#3
In international finance, what does the term 'Hedging' refer to?
A strategy to minimize risks and protect against adverse market movements
ExplanationHedging is a risk mitigation strategy safeguarding against adverse market changes in international finance.
#4
Which term describes a situation where a country exports more goods and services than it imports?
Trade surplus
ExplanationTrade surplus occurs when a country exports more goods and services than it imports.
#5
In the context of foreign exchange, what does the term 'Forex' refer to?
Foreign Exchange Market
ExplanationForex is the global marketplace for trading national currencies against one another.
#6
Which economic theory suggests that a country should specialize in producing goods for which it has the lowest opportunity cost?
Comparative Advantage
ExplanationComparative Advantage advocates specialization in areas of lower opportunity cost for optimal economic efficiency.
#7
Which economic indicator measures the average change in prices paid by consumers for goods and services over time?
Consumer Price Index (CPI)
ExplanationCPI gauges the average price changes in a basket of goods and services, reflecting inflation or deflation.
#8
What is the purpose of a 'Letter of Credit' in international trade?
To guarantee payment to the seller
ExplanationLetter of Credit ensures payment security by the buyer's bank to the seller in international transactions.
#9
What is the purpose of the 'Balance of Payments' in international finance?
To monitor trade balances
ExplanationBalance of Payments tracks a country's economic transactions with the rest of the world, focusing on trade balances.
#10
Which international trade agreement aims to reduce trade barriers and promote free trade among member countries?
World Trade Organization (WTO)
ExplanationWTO seeks to minimize trade barriers and foster free trade among member nations.
#11
What is the 'Trilemma' in international finance?
The challenge of achieving monetary independence, exchange rate stability, and financial integration simultaneously
ExplanationTrilemma poses the difficulty of concurrently achieving monetary independence, stable exchange rates, and financial integration.
#12
What is the concept of 'Dumping' in the context of international trade?
Selling goods below their production cost in a foreign market
ExplanationDumping involves selling goods in a foreign market at prices below their production costs.