#1
What is the main principle of international trade?
Self-sufficiency
Absolute advantage
Comparative advantage
Protectionism
#2
What is the World Trade Organization (WTO) responsible for?
Providing financial aid to developing countries
Regulating international currency exchange rates
Facilitating trade negotiations and resolving trade disputes
Enforcing global environmental policies
#3
What is the primary objective of the GATT (General Agreement on Tariffs and Trade)?
Promoting cultural exchange
Stabilizing global oil prices
Reducing trade barriers and promoting free trade
Addressing climate change
#4
What is the most-favored-nation (MFN) principle in international trade?
Granting special privileges to a specific trading partner
Treating all trading partners equally by extending the best trade terms
Imposing tariffs on selected countries
Boycotting certain nations
#5
What is the concept of 'currency devaluation' in the context of international trade?
Increasing the value of a country's currency
Maintaining a fixed exchange rate
Reducing the value of a country's currency relative to other currencies
Introducing a gold standard
#6
Who developed the theory of comparative advantage?
Adam Smith
John Maynard Keynes
David Ricardo
Karl Marx
#7
What is the opportunity cost in the context of comparative advantage?
The cost of producing an additional unit
The cost of producing a good in terms of other goods forgone
The cost of production in foreign countries
The cost of transportation in international trade
#8
In the context of international trade, what does the term 'dumping' refer to?
Selling goods at prices lower than their production cost in a foreign market
Excessive shipping of goods across borders
Trading in large quantities
Importing goods without tariffs
#9
What is the Smoot-Hawley Tariff Act known for in the history of international trade?
Reducing trade barriers during the Great Depression
Implementing a global free trade agreement
Introducing high tariffs and worsening the Great Depression
Creating the first international trade organization
#10
According to the theory of absolute advantage, who gains from international trade?
The country with the lowest opportunity cost
The country with the highest production cost
Both countries involved in the trade
Neither country, as it is a zero-sum game
#11
What is the 'invisible hand' in the context of international trade?
Government intervention in the economy
Market forces guiding individuals' self-interest to promote overall economic well-being
A metaphor for international cooperation
The concept of comparative advantage
#12
Which of the following is an example of a non-tariff barrier to trade?
Import quotas
Value-added tax (VAT)
Export subsidies
Ad valorem tariffs
#13
Which country is often cited as an example of successful industrial policy contradicting comparative advantage?
United States
Japan
South Korea
China
#14
What is the difference between absolute advantage and comparative advantage?
Absolute advantage focuses on cost, while comparative advantage considers opportunity cost
Comparative advantage is based on natural resources, while absolute advantage relies on technology
Absolute advantage is a modern concept, while comparative advantage is classical
There is no difference, both terms are interchangeable
#15
Which economic concept is central to the Heckscher-Ohlin theory of international trade?
Elasticity of demand
Factor endowments
Laffer curve
Marginal utility
#16
What is the role of the balance of payments in the context of international trade?
Monitoring government spending
Recording a country's economic transactions with the rest of the world
Determining exchange rates
Regulating interest rates
#17
Which international organization is responsible for coordinating monetary policy among countries?
International Monetary Fund (IMF)
World Bank
European Central Bank (ECB)
Organization of the Petroleum Exporting Countries (OPEC)
#18
What is the primary goal of a trade embargo?
Encouraging diplomatic relations
Promoting international trade
Restricting or prohibiting trade with a particular country
Ensuring fair competition in the global market
#19
In the context of international trade, what does 'tariff escalation' refer to?
A sudden decrease in import duties
Increasing tariffs on processed or finished goods compared to raw materials
Implementing free trade agreements
Reducing export taxes