The Costs of International Trade: Quiz Questions and Answers

Question 1

Which of the following is a potential cost of international trade for domestic firms?

Accepted Answer

Increased competition

Answer

Improved access to new markets

Answer

Reduced consumer choice

Answer

Higher prices for consumers

Question 2

Which industries are more susceptible to job losses due to international trade?

Accepted Answer

Industries dependent on imported raw materials and low-skilled labor

Answer

Industries producing high-value, specialized goods

Answer

Industries shielded by government subsidies

Question 3

Which of the following is NOT a potential cost of international trade for a country?

Accepted Answer

Increased economic growth

Answer

Dependence on foreign imports

Answer

Increased competition for domestic firms

Answer

Job losses in certain industries

Question 4

Which industry is most vulnerable to job losses due to cheaper imports?

Accepted Answer

Manufacturing

Answer

Agriculture

Answer

Services

Question 5

Which of the following is an example of a non-tariff barrier to international trade?

Accepted Answer

Technical regulations

Answer

Tariffs

Answer

Quotas

Answer

Embargoes

Question 6

How can international trade affect the terms of trade for a given country?

Accepted Answer

It can improve or worsen the ratio of export prices to import prices.

Answer

It always leads to an increase in the terms of trade.

Answer

It only affects the prices of agricultural products.

Question 7

Which of the following is a potential benefit of international trade, particularly for developing countries?

Accepted Answer

Access to new technologies and markets

Answer

Increased inequality

Answer

Dependence on foreign aid

Answer

Reduced economic growth

Question 8

How does international trade contribute to promoting economic growth?

Accepted Answer

By increasing specialization and efficiency

Answer

By raising taxes

Answer

By reducing government spending

Answer

By lowering interest rates

Question 9

Which of the following is a potential negative consequence of international trade?

Accepted Answer

Job losses in certain domestic industries

Answer

Improved living standards

Answer

Increased consumer choice

Answer

Economic growth

Question 10

Which industry sector is most prone to job losses due to international trade?

Accepted Answer

Manufacturing

Answer

Tourism

Answer

Services

Answer

Agriculture

Question 11

What is the primary reason why cheaper imports can lead to job losses in domestic industries?

Accepted Answer

Increased competition and reduced demand for domestic products

Answer

Government regulations

Answer

Currency fluctuations

Question 12

Which of the following is NOT a potential benefit of international trade?

Accepted Answer

Job losses in certain domestic industries

Answer

Improved living standards

Answer

Increased consumer choice

Answer

Economic growth

Question 13

The shift from domestic production to cheaper imports can result in

Accepted Answer

Structural unemployment

Answer

Cyclical unemployment

Answer

Frictional unemployment

Answer

Seasonal unemployment

Question 14

What term is used to describe the situation where domestic producers struggle to compete with lower-priced imports?

Accepted Answer

Deindustrialization

Answer

Protectionism

Answer

Globalization

Answer

Neoliberalism

Question 15

Which of the following is a potential **disadvantage** of international trade?

Accepted Answer

Job losses in certain industries

Answer

Improved technology transfer

Answer

Lower consumer prices

Answer

Increased economic growth

Question 16

Which of the following is a potential **benefit** of international trade?

Accepted Answer

Increased economic growth

Answer

Reduced technology transfer

Answer

Higher consumer prices

Answer

Job losses in certain industries

Question 17

Which of the following is a policy that can be used to **help** mitigate the negative effects of international trade?

Accepted Answer

Trade adjustment assistance

Answer

Import tariffs

Answer

Currency devaluation

Answer

Export subsidies

Question 18

Which of the following is a measure of the relative price of a country's goods and services compared to those of other countries?

Accepted Answer

Real exchange rate

Answer

Nominal exchange rate

Answer

Interest rate

Question 19

Which of the following is a factor that can lead to an appreciation of a country's currency?

Accepted Answer

Increased demand for the country's exports

Answer

Higher inflation rate

Answer

Increased demand for imports

Answer

Lower interest rates

Question 20

Which of the following is a factor that can lead to a depreciation of a country's currency?

Accepted Answer

Increased demand for imports

Answer

Increased demand for exports

Answer

Lower inflation rate

Question 21

Which of the following is a potential impact of a depreciation of a country's currency?

Accepted Answer

Increased competitiveness of the country's exports

Answer

Higher investment

Answer

Lower consumer prices

Answer

Reduced competitiveness of the country's exports

Question 22

Which of the following is a measure of the **average** overall level of prices in an economy?

Accepted Answer

Inflation rate

Answer

Unemployment rate

Answer

GDP growth rate

Question 23

Which of the following industries is most likely to experience job losses as a result of international trade?

Accepted Answer

Manufacturing

Answer

Healthcare

Answer

Services

Answer

Tourism

Question 24

How can governments mitigate the negative effects of international trade on domestic industries?

Accepted Answer

Provide job retraining programs for displaced workers

Answer

Raise interest rates

Answer

Reduce government spending

Answer

Impose tariffs on imported goods

Question 25

Which of the following is a potential benefit of international trade?

Accepted Answer

Access to a wider variety of goods and services at potentially lower prices

Answer

Reduced economic growth

Answer

Increased unemployment

Answer

Higher prices for consumers

Question 26

Which factor is most likely to contribute to a balance of payments deficit?

Accepted Answer

Higher imports than exports

Answer

A strong currency

Answer

Lower interest rates

Answer

Increased government spending

Question 27

Which of the following is an advantage of free trade?

Accepted Answer

Increased efficiency and productivity due to specialization

Answer

Protection of specific domestic industries

Answer

Higher prices for consumers

Answer

Reduced government revenue

Question 28

Which of the following is NOT an argument in favour of protectionism?

Accepted Answer

Increased consumer choice

Answer

Infant industry protection

Answer

Protection of national security

Answer

Creation of jobs

Question 29

What is the main argument in favour of globalisation?

Accepted Answer

Increased economic growth and prosperity through specialization and trade

Answer

Reduced cultural diversity

Answer

Environmental degradation

Answer

Increased inequality

Question 30

What is the term for the decline in industries or jobs due to increased imports?

Accepted Answer

Deindustrialization

Answer

Protectionism

Answer

Outsourcing

Answer

Globalization

Question 31

Which of the following is a consequence of job losses due to international trade?

Accepted Answer

Increased unemployment and reduced economic growth

Answer

Increased exports and increased GDP

Answer

Increased investment and increased innovation

Question 32

What is a potential benefit of international trade that can offset its negative impact on certain industries?

Accepted Answer

More affordable goods and services for consumers

Answer

Reduced consumer choice

Answer

Lower taxes for businesses

Answer

Increased government regulation

Question 33

Which of the following can be a negative impact of increased competition from international trade?

Accepted Answer

Bankruptcy of domestic firms

Answer

Increased government spending

Answer

Lower consumer prices

Answer

Increased investment in innovation

Question 34

What is one way that countries can reduce their dependence on foreign suppliers?

Accepted Answer

Promote domestic production

Answer

Reduce trade with other countries

Answer

Impose high tariffs on imports

Question 35

What is a potential drawback of trade adjustment assistance?

Accepted Answer

It may only provide temporary relief

Answer

It can lead to higher taxes

Answer

It can increase the national debt

Answer

It can reduce incentives for innovation

Question 36

Which of the following is a potential negative consequence of international trade?

Accepted Answer

Job losses in industries facing competition from cheaper imports

Answer

Increased consumer choice

Answer

Higher economic growth

Question 37

What is a reason why industries may experience job losses due to international trade?

Accepted Answer

Cheaper imports from countries with lower production costs

Answer

Increased demand for domestic products

Answer

Government subsidies for domestic industries

Question 38

Which of the following is a measure that governments can take to address the negative impact of international trade on domestic industries?

Accepted Answer

Provide job retraining and support programs for workers displaced by international trade

Answer

Increase tariffs on imported goods

Answer

Reduce taxes on domestic businesses

Question 39

Which of the following can be an economic consequence of increased imports?

Accepted Answer

Reduced demand for domestic products

Answer

Increased demand for domestic products

Answer

Increased economic growth

Answer

Higher levels of employment

Question 40

What is a limitation of using tariffs to protect domestic industries from international competition?

Accepted Answer

Tariffs can lead to higher prices for consumers

Answer

Tariffs can lead to increased government revenue

Answer

Tariffs can stimulate domestic innovation

Question 41

Which of the following is a potential environmental consequence of international trade?

Accepted Answer

Increased emissions from transportation of goods

Answer

Increased investment in renewable energy

Answer

Reduced use of natural resources

Answer

Improved environmental regulations

Question 42

Which of the following is a potential negative consequence of international trade for a country?

Accepted Answer

Job losses in industries facing competition from imports that are cheaper to produce abroad

Answer

Access to a wider range of raw materials and technologies

Answer

Increased consumer choice and lower prices

Question 43

The decline of the UK coal mining industry in the late 20th century is often attributed to which cost of international trade?

Accepted Answer

Increased competition from foreign coal that was cheaper to produce

Answer

Increased demand for alternative energy sources

Answer

Technological advancements in energy production

Answer

Government policies promoting alternative industries

Question 44

Which group of workers is most likely to experience job displacement due to increased imports of manufactured goods?

Accepted Answer

Low-skilled workers in the manufacturing sector

Answer

Service sector workers in healthcare and education

Answer

Agricultural workers in rural areas

Answer

Highly skilled workers in the technology sector

Question 45

What is a potential environmental cost of international trade?

Accepted Answer

Increased pollution from the transportation of goods

Answer

Reduced consumption due to higher prices for imported goods

Answer

Increased investment in renewable energy technologies

Answer

Improved environmental regulations in developing countries

Question 46

How can governments potentially alleviate the adverse impacts of international trade on domestic workers?

Accepted Answer

Provide job training and support for workers in declining industries to transition to new employment opportunities

Answer

Impose high tariffs and quotas on all imported goods

Answer

Subsidize domestic industries to make them less competitive

Question 47

What is a common criticism of using tariffs to protect domestic industries from foreign competition?

Accepted Answer

Tariffs can lead to higher prices for consumers and retaliatory tariffs from other countries, resulting in a trade war

Answer

Tariffs promote free trade and encourage international specialization

Answer

Tariffs increase government revenue and reduce the need for other taxes

Question 48

What is the concept called when a country can produce a good at a lower opportunity cost than another country?

Accepted Answer

Comparative advantage

Answer

Absolute advantage

Answer

Economic dominance

Answer

Competitive advantage

Question 49

Which of the following is a potential benefit of job displacement caused by international trade?

Accepted Answer

Workers may transition to more productive and higher-paying jobs in expanding industries

Answer

It always leads to long-term unemployment and economic decline

Answer

It benefits only foreign countries and their workers

Question 50

What is a key argument used by economists who support free trade?

Accepted Answer

Free trade leads to overall economic expansion and benefits consumers through lower prices and increased variety of choices

Answer

Free trade primarily benefits developing countries at the expense of developed countries

Question 51

What is the term used to describe the practice of selling goods in a foreign market at a price lower than their production cost?

Accepted Answer

Dumping

Answer

Importing goods that are environmentally harmful to produce

Answer

Using unethical labor practices in the production of exported goods