International Political Economy: Online Learning Quizzes

Question 1

Which of the following is a potential disadvantage of free trade?

Accepted Answer

Increased job losses

Answer

Increased economic growth

Answer

Lower consumer prices

Answer

More efficient allocation of resources

Question 2

Which criticism of the World Trade Organization (WTO) is most prevalent?

Accepted Answer

The WTO prioritizes trade liberalization without considering its potential negative impacts on developing economies.

Accepted Answer

The WTO favors the interests of developed nations over developing countries.

Answer

The WTO oversteps its authority and forces countries into unfavorable trade agreements.

Answer

The WTO's inability to enforce its decisions makes it ineffective.

Question 3

In the theory of comparative advantage, what is the term for the value of the alternative that is sacrificed when a country chooses to produce one good or service over another?

Accepted Answer

Opportunity cost

Answer

Absolute advantage

Answer

Gains from trade

Answer

Protectionism

Question 4

According to the theory of comparative advantage, which assumption is fundamental to understanding global trade patterns?

Accepted Answer

Countries with a comparative advantage in producing a good will export it and import goods where they have a comparative disadvantage.

Answer

Countries have identical production capabilities and technologies.

Answer

Countries should produce goods where they have an absolute advantage.

Answer

Protectionist policies are beneficial for domestic industries.

Question 5

What are two key factors that determine a country's comparative advantage in producing a specific good?

Accepted Answer

Natural resources

Accepted Answer

Technological advancement

Answer

Domestic market size

Answer

Government trade policies

Question 6

In international trade theory, which country should specialize in producing and exporting certain goods according to the theory of absolute advantage?

Accepted Answer

The country with the lowest production costs for those goods

Answer

The country with the highest production costs for those goods

Answer

The country with the largest domestic market for those goods

Answer

The country with the most advanced technology for producing those goods

Question 7

What is a potential negative consequence of free trade?

Accepted Answer

Job losses in specific industries

Answer

Lower prices for consumers

Answer

Greater choice for consumers

Answer

Increased economic growth

Question 8

Which of the following is a potential drawback of free trade?

Accepted Answer

Job losses

Answer

Increased consumer choice

Answer

Lower prices

Answer

Increased economic growth

Question 9

In international trade theory, which concept explains how countries gain by focusing on producing and exporting goods where they have a stronger advantage relative to other countries?

Accepted Answer

Comparative advantage

Answer

Absolute advantage

Answer

Gains from trade

Answer

Protectionism

Question 10

What is the primary purpose of a subsidy?

Accepted Answer

To provide financial assistance to domestic producers

Answer

To increase the cost of imported goods

Answer

To limit the amount of goods that can be imported

Answer

To prohibit trade between two countries

Question 11

What is a defining feature of a free trade area?

Accepted Answer

Removal of tariffs and trade barriers within member countries

Answer

Implementation of a shared external tariff and trade policy

Answer

Establishment of a single market with free movement of goods, services, and labor

Answer

Adoption of a common currency and monetary policy

Question 12

Which fundamental assumption is essential for countries to maximize their economic well-being through trade, according to the theory of comparative advantage?

Accepted Answer

Countries can increase their overall economic prosperity by specializing in goods where they have a comparative advantage and engaging in trade.

Answer

All countries have the same production costs for all goods.

Answer

Nations should prioritize producing goods where they have an absolute advantage.

Answer

Trade always benefits all participating nations.

Question 13

Which concept is NOT a key element of the theory of comparative advantage?

Accepted Answer

Autarky

Answer

Specialization

Answer

Opportunity cost

Answer

Gains from trade

Question 14

According to the theory of comparative advantage, countries should prioritize:

Accepted Answer

Specializing in producing and exporting goods with a lower opportunity cost

Answer

Producing only goods in which they have an absolute advantage

Answer

Producing all goods domestically to reduce reliance on other countries

Answer

Engaging in unrestricted free trade, eliminating barriers to both imports and exports

Question 15

Which of the following is a key assumption of the theory of comparative advantage in international trade?

Accepted Answer

Countries should specialize in producing goods where they have a lower opportunity cost.

Answer

All countries have the same production capabilities.

Answer

Free trade always benefits all countries involved.

Answer

Global welfare is maximized when all countries produce the same goods.

Question 16

According to the theory of comparative advantage, countries should specialize in producing and exporting goods where they have a:

Accepted Answer

Lower opportunity cost, allowing them to produce goods with fewer resources and at a lower cost than other countries.

Answer

Higher absolute cost, allowing them to generate more revenue from exporting those goods.

Answer

Equal opportunity cost, ensuring that all countries benefit from trade.

Answer

Lower absolute cost, allowing them to sell the goods at a lower price.

Question 17

In the theory of comparative advantage, which factor primarily determines a country's specialization and trade patterns?

Accepted Answer

Opportunity cost of production

Answer

Availability of natural resources

Answer

Level of technological advancement

Answer

Size of the domestic market

Question 18

In the Ricardian model of comparative advantage, which factor primarily determines the benefits gained from trade between nations?

Accepted Answer

The difference in opportunity costs between countries for producing various goods.

Answer

The similarity in production costs across different countries.

Answer

The absolute advantage possessed by each country in producing certain goods.

Answer

The overall size and wealth of the participating countries.

Question 19

In today's globalized world, which factor poses a significant barrier to economic development?

Accepted Answer

Political instability and weak governance

Answer

Access to education and skilled labor

Answer

Technological advancements in automation and AI

Answer

Abundance of natural resources

Question 20

In the theory of comparative advantage, what is the main factor that determines which industries nations should specialize in for production and export?

Accepted Answer

Focusing on goods where they have a comparative cost advantage

Answer

Producing goods where they have an absolute advantage

Answer

Specializing in goods with higher domestic demand

Answer

Specializing in unique goods not available elsewhere

Question 21

Which of the following is a potential drawback of free trade?

Accepted Answer

Potential job losses in specific industries

Answer

Access to a wider range of goods and services

Answer

Lower prices due to increased competition

Answer

Stimulation of economic growth

Question 22

According to the theory of comparative advantage, proposed by David Ricardo, countries can mutually benefit through trade if they:

Accepted Answer

Specialize in the production of goods and services for which they have a comparative advantage.

Answer

Have identical production possibilities frontiers.

Answer

Specialize in the production of goods and services in which they have an absolute advantage.

Question 23

Free trade can have both advantages and disadvantages for a national economy. Which of the following is a potential negative impact of free trade on the domestic labor market?

Accepted Answer

Loss of jobs in some industries

Answer

Greater variety of goods for consumers

Answer

Higher overall quality of life

Question 24

Which of the following is NOT a protectionist measure?

Accepted Answer

Free trade

Answer

Tariffs

Answer

Quotas

Answer

Government subsidies

Question 25

What is the World Trade Organization's (WTO) main goal?

Accepted Answer

Promote free trade and lower trade barriers

Answer

Control the global financial system

Answer

Provide aid to developing countries

Question 26

What is a primary function of the World Trade Organization (WTO)?

Accepted Answer

To encourage free trade by lowering trade barriers

Answer

To exclusively handle international trade matters

Answer

To solely benefit developed nations

Answer

To lack the authority to enforce its decisions

Question 27

According to the theory of comparative advantage, why do countries gain from participating in free trade?

Accepted Answer

It allows countries to specialize in producing goods and services where they have a lower opportunity cost.

Answer

It guarantees a favorable trade balance for all participating countries.

Answer

It makes international financial organizations, like the World Bank, unnecessary.

Question 28

The fundamental assumption of the theory of comparative advantage is that:

Accepted Answer

Nations should specialize in producing goods where they have a lower opportunity cost.

Answer

All countries have identical production capabilities.

Answer

Labor is the only factor of production considered.

Answer

Free trade always benefits all participating countries.

Question 29

Following World War II, which type of international monetary system was primarily adopted?

Accepted Answer

Fixed exchange rate system

Answer

Gold standard

Answer

Floating exchange rate system

Answer

Multiple exchange rate system

Question 30

What is the main goal of the International Monetary Fund (IMF)?

Accepted Answer

To foster global economic growth and stability

Answer

To regulate international trade and tariffs

Answer

To provide military aid to developing nations

Answer

To coordinate environmental policies worldwide

Question 31

Which international organization is dedicated to promoting free trade and open markets?

Accepted Answer

World Trade Organization (WTO)

Answer

International Monetary Fund (IMF)

Answer

United Nations Development Programme (UNDP)

Answer

World Bank

Question 32

Which of these is a potential advantage of free trade for a developing nation?

Accepted Answer

Expanded access to international markets for local businesses

Accepted Answer

Lower consumer prices brought on by increased competition

Answer

Shielding domestic industries from foreign rivals

Answer

Guaranteed access to vital commodities from other nations

Question 33

Which of the following is NOT an advantage of specialization, according to the theory of comparative advantage?

Accepted Answer

Guaranteed higher profits for all countries involved

Answer

Increased efficiency in production

Answer

Expanded range of goods and services available to consumers

Answer

Reduced dependence on other countries

Question 34

Which assumption underpins the Heckscher-Ohlin model?

Accepted Answer

Countries possess distinct factor endowments.

Answer

All countries produce an identical range of goods and services.

Answer

Trade solely benefits all participating countries.

Answer

Governments refrain from intervening in international trade.

Question 35

How do international institutions, such as the World Trade Organization (WTO), contribute to global trade?

Accepted Answer

International institutions offer a platform for countries to negotiate trade agreements, set common rules, and resolve disputes.

Answer

International institutions play a limited role in global trade, as countries favor bilateral agreements.

Answer

International institutions exclusively promote free trade, disregarding protectionist measures.

Answer

International institutions have no influence on international trade policies, as countries maintain complete autonomy.

Question 36

Which of these assumptions is NOT part of the classical theory of international trade?

Accepted Answer

Factors of production, such as labor, capital, and land, are perfectly mobile both domestically and internationally.

Answer

Perfect competition exists in all markets.

Answer

There is no government intervention in the economy.

Answer

Technology is constant and does not change over time.

Question 37

Which characteristic is unique to a floating exchange rate regime?

Accepted Answer

The exchange rate is determined by the forces of supply and demand in the foreign exchange market.

Answer

The government sets and maintains a fixed exchange rate against a specific currency or a basket of currencies.

Answer

The exchange rate is adjusted according to a predetermined formula.

Answer

The exchange rate is pegged to the value of a single currency, usually the US dollar.

Question 38

What is the primary aim of the World Trade Organization (WTO)?

Accepted Answer

To promote free trade among its member countries.

Answer

To safeguard intellectual property rights globally.

Answer

To resolve trade disputes and enforce trade agreements.

Answer

To provide financial support to developing countries.

Question 39

What is the primary difference between a tariff and a quota?

Accepted Answer

A tariff is a tax imposed on imported goods, while a quota sets a limit on the quantity of goods that can be imported.

Answer

A quota is a tax imposed on imported goods, while a tariff sets a limit on the quantity of goods that can be imported.

Answer

A tariff and a quota are essentially the same policy tool.

Answer

A tariff is a tax imposed on exported goods, while a quota sets a limit on the quantity of goods that can be exported.

Question 40

What is the primary purpose of the G7?

Accepted Answer

To foster cooperation among the world's leading industrialized nations.

Answer

To provide financial aid to developing countries.

Answer

To regulate the global financial system.

Answer

To determine exchange rates between currencies.

Question 41

How has technological progress influenced the relationship between international trade and global production?

Accepted Answer

Increased efficiency and reduced costs

Answer

Emergence of new trade barriers

Answer

Decline in global trade volume

Answer

Reduced focus on international cooperation

Question 42

Which concept is not central to the study of international political economy?

Accepted Answer

The impact of climate change

Answer

The interdependence of economies

Answer

The distribution of power in the international system

Answer

Policies to promote national security

Question 43

According to the mercantilist theory of international trade, the primary economic objective is to:

Accepted Answer

Maximize exports

Answer

Minimize imports

Answer

Achieve a balanced trade

Answer

Promote economic growth

Question 44

What is the primary function of the World Trade Organization (WTO)?

Accepted Answer

To regulate international trade

Answer

To provide financial support to developing countries

Answer

To maintain global security

Answer

To negotiate arms control treaties

Question 45

Which term in international relations refers to influence through diplomatic channels and cultural attraction?

Accepted Answer

Soft power

Answer

Hard power

Answer

Economic coercion

Answer

Military force

Question 46

What is referred to as the 'Washington Consensus'?

Accepted Answer

A set of economic policies advocated by the World Bank and IMF

Answer

The United States' influence in global economic matters

Answer

The importance of democratic governance

Answer

The necessity for stricter economic regulation

Question 47

Which of the following is a fundamental principle of comparative advantage theory?

Accepted Answer

Nations should specialize in producing goods in which they have a relative advantage, even if it means sacrificing absolute advantage in other areas.

Answer

Nations should specialize in producing goods in which they have an absolute advantage.

Answer

Free trade always leads to an overall increase in economic efficiency.

Answer

Tariffs are necessary to protect domestic industries from foreign competition.

Question 48

According to mercantilism, what is the primary determinant of a nation's wealth?

Accepted Answer

Its gold reserves

Answer

The value of its exports

Answer

Its population size

Answer

Its level of technological advancement

Question 49

Which of the following is a distinctive characteristic of a floating exchange rate system?

Accepted Answer

The exchange rate is determined by market forces, without government intervention.

Answer

The exchange rate is fixed at a predetermined level by the government.

Answer

The exchange rate is pegged to the value of a specific currency.

Answer

The exchange rate is set through international agreements.

Question 50

What is the primary purpose of the World Trade Organization (WTO)?

Accepted Answer

To promote free trade and reduce trade barriers

Answer

To resolve trade disputes between member countries

Answer

To provide financial aid to developing nations

Answer

To establish global standards for environmental protection

Question 51

Which of the following is NOT considered a key theory in international trade?

Accepted Answer

Realism

Answer

Mercantilism

Answer

Comparative advantage

Answer

Monetary theory

Question 52

What is the primary role of the International Monetary Fund (IMF)?

Accepted Answer

To oversee the global financial system

Answer

To provide loans to developing nations

Answer

To promote international trade

Answer

To resolve global conflicts

Question 53

According to realist theory, what is the primary objective of states in the international system?

Accepted Answer

Ensuring their security and power

Answer

Maximizing their economic prosperity

Answer

Promoting democracy and human rights

Answer

Protecting the environment

Question 54

What is the purpose of a balance of payments?

Accepted Answer

To record all economic transactions between a country and the rest of the world

Answer

To measure a country's economic growth

Answer

To control the flow of foreign investments

Answer

To determine a country's exchange rate

Question 55

Which of the following is NOT a factor that can influence the value of a country's currency?

Accepted Answer

Weather conditions

Answer

Interest rates

Answer

Inflation

Answer

Government policies

Question 56

Which of the following is NOT considered a central concept in the field of International Political Economy?

Accepted Answer

Comparative politics

Answer

Interdependence between nations

Answer

Influence of political power on economic processes

Answer

Global governance

Question 57

According to the theory of comparative advantage, what should nations prioritize in their production strategies?

Accepted Answer

Specializing in producing goods where they have a relative advantage

Answer

Specializing in producing goods where they have an absolute advantage

Answer

Producing all goods domestically for self-sufficiency

Answer

Exporting all goods to maximize revenue

Question 58

What is the primary objective of protectionist economic policies?

Accepted Answer

Reducing competition from foreign imports

Answer

Stimulating domestic production

Answer

Increasing the volume of exports

Answer

Promoting free trade and open markets

Question 59

What is the name of the treaty that laid the foundation for the European Union?

Accepted Answer

Treaty of Rome

Answer

Lisbon Treaty

Answer

Maastricht Treaty

Answer

Schengen Agreement

Question 60

What is the significance of the Bretton Woods Conference?

Accepted Answer

It established the International Monetary Fund (IMF) and World Bank

Answer

It created the United Nations (UN)

Answer

It ended the Cold War

Answer

It established the European Union (EU)

Question 61

Critics of multinational corporations (MNCs) argue that which of the following actions by these companies is problematic?

Accepted Answer

Weakening local economic self-reliance

Answer

Boosting economic growth in developing nations

Answer

Fostering international cooperation

Answer

Complying with stringent regulatory standards

Question 62

How have technological advancements influenced international trade and global economic integration?

Accepted Answer

Increased trade liberalization and reduced trade barriers

Accepted Answer

Reduced production costs and increased economic efficiency

Answer

Enhanced market concentration and consolidation

Answer

Diminished role of international organizations in regulating global trade

Question 63

Which strength is commonly associated with neoliberalism in the context of sustainable development?

Accepted Answer

Market-led mechanisms

Answer

Government intervention

Answer

Social equity and justice

Answer

Environmental sustainability

Question 64

Which assumption underpins the Ricardian model of international trade?

Accepted Answer

Differing factor endowments between countries.

Answer

Identical production capabilities across countries.

Answer

Exclusive reliance on labor as the production factor.

Answer

Guaranteed benefits from trade for all participating countries.