by - Which of the following is international trade:
- Trade between provinces
- Trade between regions
- Trade between countries
- (b) and (c) of above
Answer C
- Theory of comparative advantage was presented by:
- Adam Smith
- Ricardo
- Hicks
- Arshad
Answer B
- Which is NOT an advantage of international trade:
- Export of surplus production
- Import of defence material
- Dependence on foreign countries
- Availability of cheap raw materials
Answer C
- If Japan and India start free trade, difference in wages in two countries will:
- Increase
- Decrease
- No effect
- Double
Answer B
- Trade between two countries can be useful if cost ratios of goods are:
- Equal
- Different
- Undetermined
- Decreasing
Answer B
- Modern theory of international trade is based on the views of:
- Robbins and Ricardo
- Adam Smith and Marshall
- Heckcsher and Ohlin
- Saleem and Kareem
Answer C
- Foreign trade creates among countries:
- Conflicts
- Cooperation
- Hatred
- Both (a) & (b)
Answer B
- Net exports equal:
- Exports x Imports
- Exports + Imports
- Exports – Imports
- Exports of services only
Answer C
- A Tariff:
- Increases the volume of trade
- Reduces the volume of trade
- Has no effect on volume of trade
- (a) and (c) of above
Answer B
- A tariff is:
- A restriction on the number of export firms
- Limit on the amount of imported goods
- Tax and imports
- (b) and (c) of above
Answer C
- Dumping refers to:
- Buying goods at low prices abroad and selling at higher prices locally
- Expensive goods selling for low prices
- Reducing tariffs
- Sale of goods abroad at low a price, below their cost and price in home market
Answer D
- According to Hecksher and Ohlin basic cause of international trade is:
- Difference in factor endowments
- Difference in markets
- Difference in political systems
- Difference in ideology
Answer A
- All are advantages of foreign trade EXCEPT:
- People get foreign exchange
- Nations compete
- Cheaper goods
- Optimum utilisation of country’s resources
Answer A
- Two countries can gain from foreign trade if:
- Cost ratios are different
- Tariff rates are different
- Price ratios are different
- (a) and (c) of above
Answer D
- International trade and domestic trade differ because of:
- Trade restrictions
- Immobility of factors
- Different government policies
- All of the above
Answer D
- Terms of trade of developing countries are generally unfavorable because:
- They export primary goods
- They import value added goods
- They export few goods
- (a) and (b) of above
Answer D
- Term of trade of a country show:
- Ratio of goods exported and imported
- Ratio of import duties
- Ratio of prices of exports and imports
- (a) and (c) of above
Answer C
- In a free trade world in which no restrictions exist, international trade will lead to:
- Reduced real living standard
- Decreased efficiency
- Increased efficiency
- Reduced real GDP
Answer C
- Govt. policy about exports and imports is called:
- Monetary policy
- Fiscal policy
- Commercial policy
- Finance policy
Answer C
- What would encourage trade between two countries?
- Different tax system
- Frontier checks
- National currencies
- Reduced tariffs
Answer D
21.”Terms of trade” between two countries refer to a ratio of:
- Export prices to import prices
- Currency values
- Exports to imports
- Balance of trade to balance of payments
Answer A
- What would encourage trade between two countries?
- Different tax system
- Quality control
- Reduced tariffs
- Fixing import quota
Answer C
- It is drawback of protection:
- Consumers have to pay higher prices
- Producers get higher profits
- Quality of goods may be affected
- All of the above
Answer D
- It is drawback of free trade:
- Prices of local goods rise
- Government loses income from custom duties
- National resources are underutilized
- (a) and (b) of above
Answer B
- Gold standard means:
- Currency of the country is made of gold
- Paper currency is not used
- Currency of the country is freely convertible into gold
- (a) and (c) of above
Answer D
- Terms of trade of a country:
- Mean the trade agreement between trading countries
- Is another name of exchange ratio of two currencies
- Show the ratio between total export earnings and import bill of a country
- Are determined by the price index of export and import goods
Answer D
- India terms of trade:
- Have risen slightly over past few years
- Have fallen over past few years
- Always remain above 100
- Are determined by central govt.
Answer A
- Exchange value of rupee against other currencies has fallen because:
- Our total exports are smaller
- Our imports are more than exports
- Exports are more than imports
- India does not produce gold
Answer B
- This is an advantage of foreign trade:
- We can preserve our natural resources
- New technology comes to the country
- People need not go abroad
- We can get foreign currencies
Answer B
- This is NOT an advantage of foreign trade:
- We can get gold from abroad
- New technology comes to the country
- We can import goods which are in short supply in India
- We can made best use of natural resources
Answer A
- Foreign trade:
- Increases employment opportunities
- Increases international mobility of Labour
- Increases competition
- All of the above
Answer D
- Foreign trade:
- Benefits developed countries
- Benefits underdeveloped countries
- Benefits democratic countries
- Benefits all countries
Answer D
- Foreign trade has the advantage:
- Trading countries get foreign exchange
- Can import scarce raw materials
- Can import machinery and technology
- (b) and (c) of above
Answer D
- In foreign trade, Protection policy means:
- Restrictions on exports
- Restriction on transfer of foreign exchange
- Restrictions on imports
- All of the above
Answer C
- If a country decreases the external value of its currency, it will affect:
- Volume of exports
- Volume of imports
- General Price level
- All of the above
Answer D
- The theory explaining trade between two countries is called:
- Comparative advantage
- Comparative bargain
- Comparative trade
- Comparative returns
Answer A
- The theory explaining trade between two countries is called:
- Comparative disadvantage theory
- Comparative cost theory
- Comparative trade theory
- None of the above
Answer B
- Trade between two countries takes place when:
- Cost ratios of commodities are equal
- Cost ratios of commodities are different
- Cost ratios of commodities are high
- Cost ratios of commodities are low
Answer B
- David Ricardo presented the theory of international trade called:
- Theory of absolute advantage
- Theory of comparative advantage
- Theory of equal advantage
- Theory of total advantage
Answer B
- Rich countries have deficit in their balance of payments:
- Sometimes
- Never
- Alternate years
- Always
Answer A
- Balance of payments means:
- The balance of receipts and payments of all banks
- The balance of receipts and payments of State Bank
- The balance of receipts and payments of foreign exchange by a country
- The balance of govt. receipts and payments
Answer C
- International trade is possible primarily through:
- Generalization in production of all goods
- Specialization in production of one good
- Specialization in production of a few goods
- All of the above
Answer C
- A country that does not trade with other countries is called:
- Developed economy
- Closed economy
- Independent economy
- None of the above
Answer B
- Policy of Protection in trade:
- Facilitates trade
- Protects foreign producers
- Protects local producers
- Protects exporters
Answer C
- Commercial policy means:
- Policy about markets
- Policy about money supply
- Policy about imports and exports
- Policy for controlling of prices of goods
Answer C
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