International Trade Laws Objectives Set 2

1. The exchange of goods and services are known as …………………………

• Domestic Trade
• International Trade
• Trade
• None of these.

 

2. Which of the following is not considered as factors of production?

• Land
• Labour
• Money
• Capital

 

3. Trade between two countries is known as ………….

• External
• Internal
• Inter-regional
• None of Above

 

4. International Trade is most likely to generate short-term unemployment in:

• Industries in which there are neither imports nor exports
• Import-competing industries
• Industries that sell to domestic and foreign buyers.
• Industries that sell to only foreign buyers

 

5. Free traders maintain that an open economy is advantageous in that it provides all the following except:

• Increased competition for world producers
• A wider selection of products for consumers
• Relatively high wage levels for all domestic workers
• The utilization of the most efficient production methods

 

6. Which of the following is not a benefit of international trade?

• Lower domestic prices
• Development of more efficient methods and new products
• A greater range of consumption choices
• High wage levels for all domestic workers

 

7. Which is not an advantage of international trade:

• Export of surplus production
• Import of defence material
• Dependence on foreign countries
• Availability of cheap raw material

 

8. Trade between two countries can be useful if cost ratios of goods are …………..

• Equal
• Different
• Undetermined
• Decreasing

 

9. Foreign trade creates among countries ………………

• Conflicts
• Cooperation
• Hatred
• Both a. and b.

 

10. All are advantages of foreign trade except ………….

• People get foreign exchange
• Cheaper goods
• Nations compete
• Optimum utilization of countries’ resources

 

Q.2. Fill in the blanks.

1. International Trade means trade between …………………. (Provinces/ Countries/ Regions)
2. Two countries can give from foreign trade if ………… are different. (Effect/ Tariff/ Cost)
3. ………….. encourages trade between two countries. (Different tax system/Reduced tariffs/ National currencies)
4. Drawback of protection system is ……… (Consumers have to pay higher prices/ Producers get higher profits/ Quality of goods may be affected/ All above)
5. ………….. is a drawback of free trade. (Prices of local goods rise/ Govt. looses incomes from custom duties/National resources are underutilized)
6. International trade is possible primarily through specialization in production of …… goods. (All/ One/ Few)
7. A country that does not trade with other countries is called …… country. (Developed/ Closed/ Independent)
8. Policy of Protection in trade ……… (Facilitates trade/ Protects foreign producers/ Protects local producers/ Protects exporters)
9. The largest item of Indian import list is ……….. (Consumer goods/ Machinery/ Petroleum/ Computers)
10. Trade between two states in an economy is known as …… (External/ Internal/None)

 

SET 2

Q.1. Multiple Choice Questions.

1. Who among the following enunciated the concept of single factoral terms of trade?

• Jacob Viner
• G.S.Donens
• Taussig
• J.S.Mill

 

2. ‘Infant industry argument’ in international trade is given in support of:

• Granting Protection
• Free trade
• Encouragement to export oriented small and tiny industries
• None of the above

 

3. Terms of trade that relate to the Real Ratio of international exchange between commodities is called:

• Real cost terms of trade
• Commodity terms of trade
• Income terms of trade
• Utility terms of trade

 

4. The main advantage in specialization results from:

• Economies of large-scale production
• The specializing country behaving as monopoly.
• Smaller Production runs resulting in lower unit costs.
• High wages paid to foreign workers.

 

5. Net export equals ……

• Export * Import
• Export + Import
• Export – Import
• Exports of service only

 

6. A tariff ………………….

• Increase the volume of trade
• Reduces the volume of trade
• Has no effect on volume of trade
• Both a. and c.

 

7. Terms of Trade of developing countries are generally unfavourable because …….

• They export primary goods
• They import value added goods
• They export few goods
• Both a. and b.

 

8. Terms of Trade a country show ……………

• Ratio of goods exported and imported
• Ratio of import duties
• Ratio of prices of exports and imports
• Both a. and c.

 

9. Terms of trade between two countries refer to a ratio of …..

• Export prices to import prices
• Currency values
• Export to import
• Balance of trade to Balance of payments

 

10. Rich countries have deficit in their balance of payments ……..

• Sometimes
• Never
• Alternate years
• Always

 

Q.2. Fill in the blanks.

1. BOP means balance of Receipts and payments of …… (all banks/ State bank/ Foreign exchange by a country/ Government)
2. Favourable trade means exports are ……. than imports. (More/ Less/ Neutral)
3. Net barter terms of trade is also known as …. Terms of trade.(Commodity/ Income/Utility)
4. ….. is not a factor affecting TOT. (Reciprocal demand/ Size of demand/ Price of demand)
5. If tariff is higher, then the imports will …… (Increase/ Decrease/ Same as before)
6. ……. has given the concept of reciprocal demand. (Mills/ Adam/ Ricardo)
7. ……… is the curve, which expresses the total demand for one good (imports) in terms of the total supply of another good (exports). (Offer/ Official / Corporate)
8. Balance of payment is prepared by an economy ……. (Yearly/ Monthly/ Weekly)
9. …….. kinds of accounts are included in BOP. (2/ 3/4)
10. …….is not a type of disequilibrium in BOP. (Cyclical/ Seasonal/ Frictional/ Disguised)

 

SET 3

Q.1. Multiple Choice Questions.

1. The first classical theory of International Trade is given by …………………..

• Keynes
• Adam Smith
• Friedman
• Heckscher-Ohlin

 

2. In classical theory of International Trade, the exchange of goods and services takes on the basis of ………….. system?

• Barter
• Money
• Labour
• capital

 

3. If capital is available in large proportion and labour is less, then that economy is known as ……………..

• Capital Intensive
• Labour Intensive
• Both a. and b
• None of above

 

4. In Heckscher Ohlin theory, what is assumed to be same across the countries?

• Transportation cost
• Technology
• Labour
• capital

 

5. Opportunity cost is also known as ……………………

• Next Best alternative
• Transformation cost
• Both a. and b
• None of above.

 

6. Factor proportions theory is also known as the

• comparative advantage theory
• laissez faire theorem.
• HeckscherOhlin theorem
• product cycle model.

 

7. Trade between two countries can be useful if cost ratios of goods are:

• Equal
• Different
• Undetermined
• Decreasing

 

8. 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

 

9. The theory explaining trade between two countries is called:

• Comparative disadvantage theory
• Comparative cost theory
• Comparative trade theory
• None of the above

 

10. 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

 

Q.2. True or False.

1. Absolute advantage theory is given by Adam Smith.

True

2. Ricardo has supplemented Absolute advantage theory.

 True

3. Heckscher and Ohlin have given comparative cost advantage theory of International Trade.

False

4. Multilateral trade means one country comes into trade with more than one country.

True

5. Opportunity cost means unforgiving cost.

False

6. Modern theory of International Trade is given by Ricardo.

False

7. 2×2×2 model of International Trade is known by Heckscher Ohlin model.

True

8. Transformation cost is also known as opportunity cost.

True

9. Gravity model of trade was first used by Jan Tinbergen.

True

10. Adam Smith advocated free trade and specialized.

True

 

Set 4

Multiple Choice Questions.

1. GATT was made in the year ………………..

• 1945
• 1947
• 1950
• 1951

 

2. The new world Trade organization WTO., which replaced the GATT came into effect from____

• 1ST January 1991
• 1st January 1995
• 1st April 1994
• 1st May 1995

 

2. 5 banks of BRICS nations have agreed to establish credit lines in ….. currencies.

• Legal
• Plastic
• Crypto currency
• National

 

3. Where was the 11th meeting of BRICS Trade Ministers held from 13 Nov 2019 – 14 Nov 2019?

• Shanghai
• Beijing
• Tokyo
• Brasilia

 

4. What is the name of the SAARC satellite to be launched on May 5, 2017?

• South Asia Satellite
• South Asian Association Satellite
• South East Asia satellite
• SAARC satellite

 

5. Full form of SAFTA is ……………………..

• South Asia Free Trade Agreement
• South Asia Foreign Trade Agreement
• South Asia Framework Trade Agreement
• Both a and b

6. Which of the following commitments has not been made by India to WTO?

• Reduction in tariffs
• Increase in quantitative restrictions
• Increase in qualitative restrictions
• Trade related Intellectual Property Rights

 

7. The European Union was formally established on …..

• November, 1993
• April, 1995
• January, 1997
• May, 1996

 

8. SAARC was established in …..

• 1980
• 1985
• 1990
• 1995

 

9. NAFTA came into effect in …..

• 1990
• 1994
• 1998
• 2004

10. The dominant member state of OPEC is ……………..

• Iran
• Iraq
• Kuwait
• Saudi Arabia

 

Q.2. Fill in the blanks.

1. Headquarter of WTO is in ………….. Geneva/USA/Germany.
2. Before WTO, ……………… was working instead of that. GATY/ GATR/ GATT.
3. …………….. round negotiations initiated the establishment of WTO. Uruguay/ Urdun/ Urbuny .
4. India had joined WTO in the year …………. (1995/ 1996/ 1997)
5. In …………….. , SAARC was established. (1985/ 1986/ 1987)
6. The first SAARC summit was organized at …….. (Dhaka/ Kathmandu/ Nepal)
7. ……..is not a country in SAFTA. (India/ Nepal/ Pakistan/ USA)
8. ……… countries are member of OECD. (34/ 35/ 36)
9. ………… is not a country under OECD. (Norway/ Canada/ China)
10. ………….. are the member states of European Union. (28/ 29/30)