International Trade
(IT)
MCQs
1. BENELUX is an example of which of the following economic integration?
A. Economic union
B. Common market
C. Preferential trading
D. Free trade association
2. To explain the production effect, Viner has introduced which concepts?
A. Trade creation
B. Trade diversion
C. Both a and b
D. None of these
3. European economic community was formed by how many countries of Western Europe?
A. Two
B. four
C. five
D. six
4. European Common Market is an example of which of the following economic integration?
A. Preferential trading
B. Free trade association
C. Custom union
D. Common market
5. GATT refers to
A. General Agreement on Tariffs and Tax
B. General Agreement on Trade and Tariffs
C. General Agreement on Tariffs and Trade
D. None of these
6. What is at the top level in the structure of WTO?
A. General council
B. ministerial conference
C. dispute settlement body
D. trade policy review body
7. Following are the micro-economic impacts of globalization, except one.
A. Currency
B. Competition
C. Resource allocation
D. Customers
8. _________ is the rate at which the goods of one country are exchanged against the goods of another country.
A. International trade
B. Exchange of goods
C. Terms of trade
D. None of these
9. _______has to act as a watch dog in the field of trade in goods, services, foreign investment and intellectual property right.
A. GATT
B. WTO
C. None
D. Both
10. If the gain from international trade is more, this means that the elasticity of demand is
A. Inelastic
B. Elastic
C. Unit
D. None of these
11. When two or more countries form a custom union, they remove tariffs on the good of member countries. As a result, there is expansion of trade among the member countries. This is known as?
A. Trade creation
B. Trade diversion
C. None
D. Both
12. If the per unit cost of production after trade is more than per unit cost of production before trade, then the country is in
A. Loss
B. Gain
C. No loss no gain
D. None of these
13. If px/pm is more than 1, it indicates that the country is in
A. Gain
B. Loss
C. Both
D. None
14. Terms of trade depends upon,
A. Supply elasticity
B. Demand elasticity
C. Value of currency
D. Quantity of imports and exports
15. Gains from trade can be measured in terms of ______
A. Cost reduction
B. Improvement in marginal physical product of labor
C. Both a and b
D. None of these
16. The impact of globalization can be divided as
A. Economic and non-economic
B. Macro-economic and micro-economic
C. Internal and external
D. None of these
17. In which of the following forms of economic integration, there are free movements of factors of production?
A. Custom union
B. Common market
C. Economic union
D. Both b and c
18. Free trade encourages monopolies?
A. Yes
B. No
C. Both
D. None
19. The country will specialize in the production and export of those goods which has comparatively ______ cost advantage.
A. High
B. Low
C. Neutral
D. None of these
20. The origin of GATT was in which year?
A. 1946
B. 1947
C. 1948
D. 1949
21. The members of EEC are appointed for how many years?
A. Five
B. four
C. six
D. three
22. ________ means absence of any restrictions on the movement of goods between the countries.
A. International trade
B. Terms of trade
C. Free trade
D. Protection
23. In which type of economic integration, two or more countries form a custom union, and in addition to this they allow free and unrestricted movement of all the factors of production (labor & capital) between the member countries?
A. economic union
B. common market
C. preferential trading
D. free trade association
24. _________ refers to any policy that raises the price of import substitution and safeguards the interest of domestic producers against foreign competition.
A. International trade
B. Terms of trade
C. Free trade
D. Protection
25. Which of the following acts on the behalf of ministerial conference in the structure of WTO?
A. Council
B. trade policy review body
C. general council
D. committees
26. The Cecchini Report 1988 claimed how many creations of new jobs in the 1992 reforms of EEC?
A. 3 million
B. 4 million
C. 1 million
D. 2 million
27. How many types of economic integration are there?
A. Two
B. three
C. four
D. five
28. Following are the economic advantages of free trade except one.
A. Against monopolies
B. Cut-throat competition
C. Cheaper imports
D. Expand the size of market
29. WTO was established in which year?
A. 1995
B. 1996
C. 1997
D. 1998
30. If the supply of the commodity is more elastic, the price will rise to a larger extent.
A. True
B. False
C. Both
D. None
31. Following are the non-economic arguments in favor of protection.
A. Preservation
B. Defense
C. Nationality
D. All of these
32. ________ means a decision or process, whereby two or more countries combine into a larger economic region by removing discrimination existing along national frontiers, and by establishing certain elements of co-ordination between them.
A. Preferential Trading
B. economic integration
C. free trade association
D. none of these
33. In which year the reforms of EEC were introduced?
A. 1992
B. 1993
C. 1994
D. 1995
34. Which type of barrier arise due to the cost and distance involved in the movement of goods and services from one country to another country?
A. Man-made barriers to trade
B. Natural barriers to trade
C. Both
D. None
35. Which of the following trade is a loose organization?
A. Free trade organization
B. Custom union
C. Custom market
D. Preferential trading
36. Tariff leads to
A. Import-substitution
B. Discourage imports
C. Encourage production of domestic goods
D. All of these
37. Following are the requirements to become the members of EEC.
A. The country must be European country
B. It must be democratic country
C. None
D. Both a and b
38. Which of the following economic integration, discourages the trade with nonmember countries?
A. Economic union
B. Common market
C. Free trade association
D. None of these
39. Which of the following are the non-tariff barriers?
A. Quantitative restrictions
B. Monetary restrictions
C. Administrative and technical restrictions
D. All of these
40. International trade provides benefits of _________ and _________.
A. Terms of trade and division of labor
B. International specifications and division of labor
C. Terms of trade and international specifications
D. International specialization and division of labor
41. As a result of formation of custom union, goods of member countries become cheaper. So, there is diversion of trade from non-member country to member country. This is known as?
A. Trade creation
B. Trade diversion
C. Both
D. None
42. The terms of trade may be favorable or unfavorable depends upon
A. Quantity of imports and exports
B. Price of imports and exports
C. Value of currency
D. None of these
43. The theory of customs union was first developed by whom?
A. Adam Smith
B. Keynes
C. Jacob winer
D. None of these
44. Following are the static benefits of common market except one.
A. Choice of jobs
B. Fall in prices
C. Foreign investment
D. Gains to efficient producers
45. What is the relation between cost difference and gain?
A. Direct
B. Inverse
C. No relation
D. None of these
46. Due to international trade, there is
A. Depreciation in the currency value
B. Appreciation in the currency value
C. Increase in exports
D. Both b and c
47. In which type of economic integration, there are two or more countries come together, form a trading club and reduce tariffs on the imports of each other. But they maintain their individual tariffs against other countries?
A. Free trade association
B. Preferential trading
C. Custom union
D. Common market
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