#1
Which organization is responsible for setting international trade rules?
World Trade Organization
ExplanationRegulates and facilitates international trade agreements.
#2
Which country is the largest exporter of goods in the world?
China
ExplanationChina leads in global exports due to its manufacturing sector.
#3
Which of the following is not a type of trade barrier?
Economic integration
ExplanationEconomic integration fosters trade rather than restricting it.
#4
Which term refers to the practice of selling goods and services to a foreign market at a price lower than the domestic price?
Dumping
ExplanationStrategy to undercut competitors in foreign markets.
#5
Which term refers to a situation where a country exports more than it imports?
Trade surplus
ExplanationExcess of exports over imports in monetary value.
#6
Which trade theory suggests that countries should specialize in producing and exporting goods in which they have a comparative advantage?
Comparative advantage theory
ExplanationEmphasizes exploiting efficiency differences for mutual benefit.
#7
What does 'GATT' stand for in the context of international trade?
General Agreement on Tariffs and Trade
ExplanationHistorical agreement aimed at reducing barriers to trade.
#8
What is the 'balance of trade'?
The difference between a country's imports and exports of goods
ExplanationIndicator of a country's trade surplus or deficit.
#9
What is the main purpose of trade barriers?
To restrict imports and protect domestic industries
ExplanationIntended to shield domestic markets from foreign competition.
#10
What is 'dumping' in the context of international trade?
Selling goods in a foreign market at a price lower than the domestic market
ExplanationPractice aimed at gaining market share through pricing strategies.
#11
What is the main objective of the General Agreement on Tariffs and Trade (GATT)?
To reduce barriers to international trade
ExplanationAims to promote global trade liberalization.
#12
What is the primary goal of trade liberalization?
To reduce barriers and promote free trade
ExplanationSeeks to enhance economic efficiency through openness.
#13
Which trade theory suggests that a country should specialize in producing goods for which it has the lowest opportunity cost?
Comparative advantage theory
ExplanationFocuses on exploiting relative efficiencies for trade.
#14
Which trade theory emphasizes the role of factor endowments in determining comparative advantage?
Heckscher-Ohlin theory
ExplanationStates that countries export goods that intensively use their abundant factors.
#15
Which trade theory suggests that trade is determined by economies of scale and product differentiation?
New trade theory
ExplanationFocuses on factors beyond comparative advantage.