- 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) Government Debt Portfolio
B) Gross Domestic Product
C) Global Demand Projection
D) General Development Policy
- 2. Which organization is responsible for overseeing the global financial system?
A) United Nations (UN)
B) World Trade Organization (WTO)
C) World Bank
D) International Monetary Fund (IMF)
- 3. What does NAFTA stand for?
A) Newly Adopted Financial Trading Act
B) North American Free Trade Agreement
C) National Agricultural Fair Trade Association
D) Northern Atlantic Financial Transactions Agreement
- 4. Which country has the world's largest economy as of 2021?
A) Germany
B) China
C) Japan
D) United States
- 5. What is the main purpose of tariffs in international trade?
A) To promote open and free trade
B) To encourage foreign investment
C) To protect domestic industries from foreign competition
D) To increase overall consumer welfare
- 6. Which theory suggests that countries should specialize in producing goods where they have a comparative advantage?
A) Comparative Advantage Theory
B) Mercantilism
C) Absolute Advantage Theory
D) Ricardian Equivalence
- 7. What is the role of the World Bank in the international economy?
A) Setting international interest rates
B) Providing financial and technical assistance to developing countries
C) Regulating global trade agreements
D) Controlling currency exchange rates
- 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 regulate global currency exchange rates
C) To promote international trade by reducing trade barriers
D) To enforce international labor standards
- 9. What is the term for a situation where a country can produce a good at a lower opportunity cost than another country?
A) Opportunity cost advantage
B) Specialization benefit
C) Comparative advantage
D) Absolute advantage
- 10. Which trade theory suggests that countries should produce and export goods that require resources they have in abundance?
A) Heckscher-Ohlin Theory
B) Linder Hypothesis
C) Factor Proportions Theory
D) Mercantilism
- 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) Managed exchange rate
B) Floating exchange rate
C) Pegged exchange rate
D) Fixed exchange rate
- 12. What is the most common measure of a country's level of economic output?
A) Consumer Price Index (CPI)
B) Balance of trade
C) Gross Domestic Product (GDP)
D) Unemployment rate
- 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) Current account balance
C) Budget balance
D) Trade balance
- 14. What does FDI stand for in the context of international economics?
A) Foreign Development Initiative
B) Free Domestic Investment
C) Financial Disclosure Index
D) Foreign Direct Investment
- 15. What is the term for the price of one currency in terms of another currency?
A) Interest rate
B) Exchange rate
C) Growth rate
D) Inflation rate
- 16. Which country had the world's second-largest economy as of 2021?
A) Germany
B) India
C) China
D) Japan
- 17. What is the primary goal of exchange rate policy?
A) Maximizing trade deficits
B) Achieving currency depreciation
C) Promoting speculative activities
D) Maintaining price stability and fostering economic growth
- 18. Which country's currency is known as the yen?
A) China
B) South Korea
C) Japan
D) India
- 19. What type of trade occurs when a country exports more goods than it imports?
A) Current account surplus
B) Trade surplus
C) Trade deficit
D) Balance of trade
- 20. What is the term for the total value of a country's exports and imports of goods and services?
A) Trade surplus
B) Capital account balance
C) Current account balance
D) Balance of trade
A) A tax imposed on imported goods
B) A financial aid package for exporters
C) A specific quota on exports
D) A trade agreement between nations
- 22. Which entity issues a country's currency?
A) Ministry of Finance
B) International Monetary Fund
C) Treasury Department
D) Central Bank
- 23. What is the economic theory that suggests government spending and tax cuts can stimulate economic growth?
A) Monetarism
B) Austrian School Economics
C) Supply-Side Economics
D) Keynesian 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) Monopoly
B) Oligopoly
C) Cartel
D) Duopoly
- 26. Who is often referred to as the 'Father of Economics' and wrote 'The Wealth of Nations'?
A) Karl Marx
B) Adam Smith
C) John Maynard Keynes
D) David Ricardo
- 27. What is the term for a good that is non-excludable and non-rivalrous in consumption?
A) Public Good
B) Private Good
C) Common Resource
D) Club Good
- 28. Who developed the 'Laffer Curve' which illustrates the relationship between tax rates and tax revenue?
A) Paul Krugman
B) John Maynard Keynes
C) Arthur Laffer
D) Milton Friedman
- 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) Depreciation
C) Appreciation
D) Revaluation
- 30. What is the economic term for the value of the next best alternative foregone in making a decision?
A) Marginal Cost
B) Opportunity Cost
C) Variable Cost
D) Sunk 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) Association of Southeast Asian Nations (ASEAN)
B) North American Free Trade Agreement (NAFTA)
C) Organization of the Petroleum Exporting Countries (OPEC)
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) Tariff
B) Quota
C) Subsidy
D) Embargo
- 34. Which trade barrier is a government tax imposed on goods entering or leaving a country?
A) Embargo
B) Quota
C) Subsidy
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) North American Free Trade Agreement (NAFTA)
B) Trans-Pacific Partnership (TPP)
C) Association of Southeast Asian Nations (ASEAN)
D) European Union (EU)
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