International Trade and Protectionism Quiz

What is one advantage of international trade for households?

• Increased prices for imported goods

• Greater variety of goods and services

• Decreased competition

• Higher tariffs on exports

Which of the following is a disadvantage of international trade for firms?

• Access to larger markets

• Increased competition from foreign companies

• Economies of scale

• Access to cheaper raw materials

What is a common argument against the implementation of protectionist policies?

• They protect domestic jobs

• They lead to trade wars

• They increase government revenue

• They support infant industries

Which method of protectionism involves setting a limit on the quantity of a good that can be imported?

• Tariffs

• Quotas

• Subsidies

• Exchange rate manipulation

What is one benefit of globalisation for the economy as a whole?

• Increased isolation

• Greater cultural exchange

• Higher trade barriers

• Reduced foreign investment

Which sector is a major export for the UK?

• Agriculture

• Financial services

• Textiles

• Automobiles

How does the theory of comparative advantage benefit countries?

• By allowing them to produce all goods more efficiently

• By enabling them to specialise in goods they produce at a lower opportunity cost

• By increasing tariffs on imported goods

• By reducing the need for international trade

What is the difference between absolute and comparative advantage?

• Absolute advantage refers to producing more of a good, while comparative advantage refers to producing at a lower opportunity cost

• Absolute advantage is about lower opportunity cost, while comparative advantage is about producing more

• Both refer to producing goods at a lower cost

• There is no difference

What is the role of the World Trade Organisation (WTO)?

• To impose tariffs on all member countries

• To police trade agreements and negotiations

• To provide subsidies to developing countries

• To regulate exchange rates

Which of the following is a cost of globalisation?

• Increased cultural exchange

• Loss of domestic jobs

• Access to new markets

• Technological advancement