Mid Semester Exam Politics of International Trade

Politics naturally controls and protects the interest of many groups through these tools except

• provisions

• subsidies

• regulations

• market

The only value that politics and economics share is

• A. security

• justice

• efficiency

• equity

Trade is a manifestation of economic activity since it involves these activities except

• supply and demand between nations in international market.

• Competitions between firms for bigger control in market.

• Regulation to protect local market from product invasions

• Labour and capital mobility across border

International trade takes place when market expands to get __________ that otherwise may not have been available to it.

• government permission

• goods and services

• foreign investment

• market access

The first principle that suggest trade as an economic activity is that

• nation has unlimited wants and desires.

• nation is not self-sufficient

• we live in a world of scarcity

• we determine our own life

The phrase 'invisible-hand' as purported by Adam Smith as the logic behind market motivation refers to

• common interest

• individual self-interest

• human soul

• selfishness

Command economy is different from market economy where ______________ determines what to produce, how to produce and for whom to produce.

• individuals

• households

• government

• firms

What is one advantage of establishing trade barriers rather than allowing free trade?

• An increase in local regulations

• The improvement of foreign relations

• The protection of domestic industries

• A reduction in foreign product prices.

Which of these answers is correct to admit that the international trade bringing change to nation states?

• Mercantilism

• Liberalism

• Marxism

• All of the above

_______________ believes that international trade is characterized by interdependence and not dependence.

• Mercantilism

• Liberalism

• Marxism

• Rational Choice