- 1. International economics is the study of how economic interactions among countries influence global trade and productivity. It involves analyzing the impact of policies, exchange rates, and trade agreements on the movement of goods and services across borders. International economics also considers the distribution of income and wealth on a global scale, as well as the implications of migration and capital flows. By understanding the complexities of international economic relationships, policymakers and businesses can make informed decisions to promote sustainable growth and development.
What does GDP stand for?
A) General Development Policy
B) Government Debt Portfolio
C) Global Demand Projection
D) Gross Domestic Product
- 2. Which organization is responsible for overseeing the global financial system?
A) World Bank
B) World Trade Organization (WTO)
C) United Nations (UN)
D) International Monetary Fund (IMF)
- 3. What does NAFTA stand for?
A) National Agricultural Fair Trade Association
B) North American Free Trade Agreement
C) Newly Adopted Financial Trading Act
D) Northern Atlantic Financial Transactions Agreement
- 4. Which country has the world's largest economy as of 2021?
A) Germany
B) United States
C) Japan
D) China
- 5. What is the main purpose of tariffs in international trade?
A) To increase overall consumer welfare
B) To encourage foreign investment
C) To promote open and free trade
D) To protect domestic industries from foreign competition
- 6. Which theory suggests that countries should specialize in producing goods where they have a comparative advantage?
A) Comparative Advantage Theory
B) Ricardian Equivalence
C) Absolute Advantage Theory
D) Mercantilism
- 7. What is the role of the World Bank in the international economy?
A) Setting international interest rates
B) Controlling currency exchange rates
C) Providing financial and technical assistance to developing countries
D) Regulating global trade agreements
- 8. What is the main goal of the General Agreement on Tariffs and Trade (GATT)?
A) To provide financial aid to developing countries
B) To enforce international labor standards
C) To regulate global currency exchange rates
D) To promote international trade by reducing trade barriers
- 9. What is the term for a situation where a country can produce a good at a lower opportunity cost than another country?
A) Comparative advantage
B) Specialization benefit
C) Absolute advantage
D) Opportunity cost advantage
- 10. Which trade theory suggests that countries should produce and export goods that require resources they have in abundance?
A) Linder Hypothesis
B) Heckscher-Ohlin Theory
C) Mercantilism
D) Factor Proportions Theory
- 11. Which exchange rate system allows the value of a country's currency to be determined by supply and demand in the foreign exchange market?
A) Fixed exchange rate
B) Floating exchange rate
C) Pegged exchange rate
D) Managed exchange rate
- 12. What is the most common measure of a country's level of economic output?
A) Consumer Price Index (CPI)
B) Gross Domestic Product (GDP)
C) Unemployment rate
D) Balance of trade
- 13. What is the term for the total value of a country's exports minus the total value of its imports?
A) Capital account balance
B) Budget balance
C) Trade balance
D) Current account balance
- 14. What does FDI stand for in the context of international economics?
A) Foreign Development Initiative
B) Financial Disclosure Index
C) Free Domestic Investment
D) Foreign Direct Investment
- 15. What is the term for the price of one currency in terms of another currency?
A) Exchange rate
B) Growth rate
C) Inflation rate
D) Interest rate
- 16. Which country had the world's second-largest economy as of 2021?
A) Germany
B) China
C) India
D) Japan
- 17. What is the primary goal of exchange rate policy?
A) Achieving currency depreciation
B) Promoting speculative activities
C) Maximizing trade deficits
D) Maintaining price stability and fostering economic growth
- 18. Which country's currency is known as the yen?
A) India
B) China
C) South Korea
D) Japan
- 19. What type of trade occurs when a country exports more goods than it imports?
A) Trade surplus
B) Trade deficit
C) Balance of trade
D) Current account surplus
- 20. What is the term for the total value of a country's exports and imports of goods and services?
A) Balance of trade
B) Current account balance
C) Trade surplus
D) Capital account balance
A) A specific quota on exports
B) A tax imposed on imported goods
C) A trade agreement between nations
D) A financial aid package for exporters
- 22. Which entity issues a country's currency?
A) International Monetary Fund
B) Ministry of Finance
C) Central Bank
D) Treasury Department
- 23. What is the economic theory that suggests government spending and tax cuts can stimulate economic growth?
A) Austrian School Economics
B) Keynesian Economics
C) Monetarism
D) Supply-Side Economics
- 24. Which country is known to have a comparative advantage in producing wine due to its climate and soil conditions?
A) China
B) Brazil
C) Russia
D) France
- 25. What is the term for a situation where a single company dominates an entire industry?
A) Oligopoly
B) Monopoly
C) Duopoly
D) Cartel
- 26. Who is often referred to as the 'Father of Economics' and wrote 'The Wealth of Nations'?
A) Karl Marx
B) John Maynard Keynes
C) David Ricardo
D) Adam Smith
- 27. What is the term for a good that is non-excludable and non-rivalrous in consumption?
A) Private Good
B) Common Resource
C) Public Good
D) Club Good
- 28. Who developed the 'Laffer Curve' which illustrates the relationship between tax rates and tax revenue?
A) Milton Friedman
B) Arthur Laffer
C) Paul Krugman
D) John Maynard Keynes
- 29. What is the term for a situation where the government intentionally lowers the value of its currency relative to foreign currencies?
A) Devaluation
B) Revaluation
C) Appreciation
D) Depreciation
- 30. What is the economic term for the value of the next best alternative foregone in making a decision?
A) Sunk Cost
B) Marginal Cost
C) Variable Cost
D) Opportunity Cost
- 31. What is the term for a situation in which a country restricts trade with other countries by imposing tariffs, quotas, or other barriers?
A) Specialization
B) Comparative Advantage
C) Free Trade
D) Protectionism
- 32. Which agreement aims to promote economic cooperation and regional integration among European countries?
A) North American Free Trade Agreement (NAFTA)
B) Organization of the Petroleum Exporting Countries (OPEC)
C) Association of Southeast Asian Nations (ASEAN)
D) European Union (EU)
- 33. What type of trade barrier imposes a limit on the quantity of a good that can be imported into a country?
A) Subsidy
B) Quota
C) Tariff
D) Embargo
- 34. Which trade barrier is a government tax imposed on goods entering or leaving a country?
A) Quota
B) Subsidy
C) Embargo
D) Tariff
- 35. Which agreement is a trade pact among 11 Pacific Rim countries that aims to promote economic cooperation and reduce trade barriers?
A) Trans-Pacific Partnership (TPP)
B) North American Free Trade Agreement (NAFTA)
C) European Union (EU)
D) Association of Southeast Asian Nations (ASEAN)
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