International Trade and Economics Quiz

What are the key concepts related to international trade?

• Globalization, comparative advantage, and interdependence

• Nationalization, competitive advantage, and independence

• Localization, competitive disadvantage, and dependence

• Globalization, competitive advantage, and independence

What is a key objective of supply chain management?

• Enhancing operational efficiency

• Minimizing supplier relationships

• Maximizing production costs

• Ignoring demand fluctuations

In a fixed exchange rate regime:

• Governments commit to maintaining the value of their currency at a set rate

• Exchange rates are determined solely by market forces

• Currency values fluctuate widely with no intervention

• Central banks don't influence currency values

What is the disadvantage of a protective tariff for a small country?

• Retaliation from trading partners

• Increased consumer choices

• Enhanced domestic industries

• Lower production costs

What is one disadvantage of a tariff policy in international trade?

• It can lead to retaliatory tariffs from other countries

• It can result in increased employment opportunities

• It can lead to a more diverse and competitive market

• It can lead to lower government revenue from imports

What is a pegged exchange rate regime?

• A country fixes its currency's value to another major currency or a basket of currencies

• Exchange rates fluctuate freely without any intervention

• Governments avoid any influence on currency values

• Exchange rates are determined by gold reserves only

The presence of increasing returns to scale in an industry tends to

• Give a comparative advantage in that industry to large countries.

• Discourage producers from exporting.

• Make that industry perfectly competitive.

• Cause price in that industry to rise with output

What does the Big Mac Index, often used to illustrate PPP, compare between countries?

• The prices of a McDonald's Big Mac burger

• The cost of living

• Unemployment rates

• Gross domestic product

When were INCOTERMS introduced ?

• INCOTERMS were first introduced in 1936 by the International Chamber of Commerce

• INCOTERMS were first introduced in 1990 by the International Chamber of Commerce

• INCOTERMS were first introduced in 2010 by the International Chamber of Commerce

• INCOTERMS were first introduced in 2015 by the International Chamber of Commerce

Disadvantages of Tariff Policy: Question: What could be a drawback of relying heavily on tariffs for trade regulation?

• Trade Retaliation from Other Nations

• Enhanced Global Cooperation

• Boost in Foreign Direct Investment

• Improved Consumer Choices