International Trade Laws Objectives Set 1

14/08/2020 1 By indiafreenotes
  1. Which of the following is international trade:
  • Trade between provinces
  • Trade between regions
  • Trade between countries
  • (b) and (c) of above

Answer C

 

  1. Theory of comparative advantage was presented by:
  • Adam Smith
  • Ricardo
  • Hicks
  • Arshad

Answer B

 

  1. 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

 

  1. If Japan and India start free trade, difference in wages in two countries will:
  • Increase
  • Decrease
  • No effect
  • Double

Answer B

 

  1. Trade between two countries can be useful if cost ratios of goods are:
  • Equal
  • Different
  • Undetermined
  • Decreasing

Answer B

 

  1. 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

 

  1. Foreign trade creates among countries:
  • Conflicts
  • Cooperation
  • Hatred
  • Both (a) & (b)

Answer B

 

  1. Net exports equal:
  • Exports x Imports
  • Exports + Imports
  • Exports – Imports
  • Exports of services only

Answer C

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. All are advantages of foreign trade EXCEPT:
  • People get foreign exchange
  • Nations compete
  • Cheaper goods
  • Optimum utilisation of country’s resources

Answer A

 

  1. 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

 

  1. International trade and domestic trade differ because of:
  • Trade restrictions
  • Immobility of factors
  • Different government policies
  • All of the above

Answer D

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. Govt. policy about exports and imports is called:
  • Monetary policy
  • Fiscal policy
  • Commercial policy
  • Finance policy

Answer C

 

  1. 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

 

  1. What would encourage trade between two countries?
  • Different tax system
  • Quality control
  • Reduced tariffs
  • Fixing import quota

Answer C

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. 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

 

  1. Foreign trade:
  • Increases employment opportunities
  • Increases international mobility of Labour
  • Increases competition
  • All of the above

Answer D

 

  1. Foreign trade:
  • Benefits developed countries
  • Benefits underdeveloped countries
  • Benefits democratic countries
  • Benefits all countries

Answer D

 

  1. 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

 

  1. In foreign trade, Protection policy means:
  • Restrictions on exports
  • Restriction on transfer of foreign exchange
  • Restrictions on imports
  • All of the above

Answer C

 

  1. 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

 

  1. The theory explaining trade between two countries is called:
  • Comparative advantage
  • Comparative bargain
  • Comparative trade
  • Comparative returns

Answer A

 

  1. The theory explaining trade between two countries is called:
  • Comparative disadvantage theory
  • Comparative cost theory
  • Comparative trade theory
  • None of the above

Answer B

 

  1. 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

 

  1. 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

 

  1. Rich countries have deficit in their balance of payments:
  • Sometimes
  • Never
  • Alternate years
  • Always

Answer A

 

  1. 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

 

  1. 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

 

  1. A country that does not trade with other countries is called:
  • Developed economy
  • Closed economy
  • Independent economy
  • None of the above

Answer B

 

  1. Policy of Protection in trade:
  • Facilitates trade
  • Protects foreign producers
  • Protects local producers
  • Protects exporters

Answer C

 

  1. Commercial policy means:
  • Policy about markets
  • Policy about money supply
  • Policy about imports and exports
  • Policy for controlling of prices of goods

Answer C