International Trade: Benefits, Costs, and Impacts - Economics Quiz

Question 1

Which type of trade barrier involves restrictions on the quantity of goods that can be imported or exported?

Accepted Answer

Quota

Answer

Tariff

Answer

Embargo

Answer

Subsidy

Question 2

The balance of trade refers to:

Accepted Answer

The difference between the value of a country's exports and imports

Answer

The total value of a country's exports

Answer

The total value of a country's imports

Answer

The difference between a country's GDP and its national income

Question 3

The impact of trade on economic growth can be:

Accepted Answer

Both positive and negative depending on the specific industries affected

Answer

Positive through increased competition and innovation

Answer

Negative due to job losses in import-competing industries

Answer

Neutral with no significant impact

Question 4

The measure that captures the price competitiveness of a country's exports in relation to its competitors is the:

Accepted Answer

Real effective exchange rate

Answer

Consumer price index

Answer

GDP per capita

Answer

Balance of payments

Question 5

Which of the following is NOT a commonly cited reason for implementing non-tariff trade barriers?

Accepted Answer

Promoting economic growth in developing countries

Answer

Protecting domestic industries from foreign competition

Answer

Reducing a country's trade deficit

Answer

Ensuring national security by restricting the import of potentially dangerous goods

Question 6

Which trade policy involves imposing charges on imported goods to increase their cost?

Accepted Answer

Tariff

Answer

Quota

Answer

Sanction

Answer

Embargo

Question 7

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

Accepted Answer

To facilitate free trade and settle trade disputes among member nations

Answer

To regulate international financial markets and provide economic aid to developing countries

Answer

To enforce international law and promote world peace

Answer

To set global standards for environmental protection and human rights

Question 8

Which of the following best defines a country's comparative advantage in a particular industry?

Accepted Answer

Producing goods at a lower cost than other countries

Answer

Receiving government subsidies or incentives

Answer

Having a larger domestic market share than competitors

Answer

Using the most advanced technology in production

Question 9

What is the key distinction between an import quota and a tariff?

Accepted Answer

An import quota restricts the quantity of goods that can be imported, while a tariff adds a financial charge on imported goods.

Answer

An import quota is a temporary measure, while a tariff is a permanent one.

Answer

An import quota applies to all imported goods, while a tariff targets specific goods.

Answer

There is no significant difference between an import quota and a tariff.

Question 10

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

Accepted Answer

Loss of domestic jobs

Answer

Increased competition

Answer

Access to a wider range of goods and services

Answer

Promotion of economic growth

Question 11

Which of the following is a type of non-tariff trade barrier?

Accepted Answer

Technical regulations

Answer

Tariffs

Answer

Quotas

Answer

Embargoes

Question 12

According to the theory of comparative advantage, countries should:

Accepted Answer

Produce goods that they can produce with a lower opportunity cost

Answer

Only produce goods they have an absolute advantage in

Answer

Always import goods from countries with lower production costs

Answer

Limit trade to protect domestic industries

Question 13

Which of the following measures the extent to which a country engages in international trade?

Accepted Answer

Export-import ratio

Answer

Trade deficit

Answer

Trade surplus

Answer

Balance of payments

Question 14

International trade offers various benefits. Which of the following is NOT considered an advantage of international trade?

Accepted Answer

Increased consumer prices

Answer

Greater variety of goods and services

Answer

Increased economic growth

Answer

Greater job opportunities

Question 15

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

Accepted Answer

Reduced competition

Answer

Increased consumer choice

Answer

Increased economic cooperation between countries

Answer

Access to cheaper goods and services

Question 16

Which of the following is a significant barrier to international trade?

Accepted Answer

Tariffs

Answer

Currency exchange rates

Answer

Free trade agreements

Answer

Government subsidies

Question 17

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

Accepted Answer

Job losses in specific industries

Answer

Reduced economic inequality

Answer

Lower prices for consumers

Answer

Increased competition

Question 18

Which of the following is a type of government policy related to international trade?

Accepted Answer

Protectionism

Answer

Fiscal policy

Answer

Inflation

Answer

Monetary policy

Question 19

Which of the following is a potential advantage of free trade agreements?

Accepted Answer

Reduced tariffs and other trade barriers

Answer

Increased inequality

Answer

Increased bureaucracy

Answer

Reduced consumer choice

Question 20

Which of the following is a potential consequence of a persistent trade deficit?

Accepted Answer

Depreciation of the domestic currency

Answer

Increased investment

Answer

Increased economic growth

Answer

Lower inflation

Question 21

Which of the following is a measure commonly used to assess a country's openness to international trade?

Accepted Answer

Trade-to-GDP ratio

Answer

Consumer price index

Answer

Current account balance

Answer

Balance of trade

Question 22

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

Accepted Answer

Increased economic growth

Answer

Reduced government revenue

Answer

Increased inequality

Answer

Increased unemployment