#1
Which of the following is an example of a tariff barrier?
Value-added tax (VAT)
ExplanationTariff barrier: Taxes imposed on imported goods.
#2
What does FDI stand for?
Foreign Direct Investment
ExplanationFDI: Investment made by a company or individual in another country.
#3
Which international organization is primarily responsible for setting global trade rules?
World Trade Organization (WTO)
ExplanationWTO: Facilitates trade negotiations and resolves disputes.
#4
What does 'GATT' stand for in the context of international trade?
Global Agreement on Tariffs and Trade
ExplanationGATT: Promotes international trade by reducing barriers.
#5
What is the purpose of a trade deficit?
To finance domestic consumption
ExplanationTrade deficit: Imports exceed exports, financing consumption.
#6
Which theory suggests that countries should specialize in producing goods they are most efficient at?
Theory of Comparative Advantage
ExplanationComparative Advantage: Nations specialize to maximize efficiency.
#7
Which of the following is an example of a non-tariff barrier to trade?
Customs procedures
ExplanationNon-tariff barrier: Regulations hindering imports.
#8
What is the 'Most Favored Nation' principle in trade agreements?
Granting the best trade terms offered to any other country
ExplanationMFN: Ensures equal trade treatment among WTO members.
#9
What is a 'balance of payments'?
A financial statement summarizing all economic transactions between a country and the rest of the world
ExplanationBalance of Payments: Records a country's economic transactions.
#10
What is the 'Laffer Curve' often associated with in international trade?
Taxation policies
ExplanationLaffer Curve: Relationship between tax rates and tax revenue.
#11
What is 'dumping' in the context of international trade?
Selling goods in a foreign market at a price below production cost
ExplanationDumping: Unfair practice of selling goods below production cost in foreign markets.