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Worksheetsfree trade is good
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
historically countries have relied upon trade protection to
a)
maintain price stability
b)
achieve external balance and full employment
c)
boost GDP by exploiting less developed economies who can supply cheaper goods
d)
to increase government revenue
2.
the main types of trade protection have been
a)
voluntary export restraints , voluntary cash flow remittances and retrocapital flows
b)
financial barriers that make imports of lower quality
c)
financial barriers that increase the cost of imports and lower production costs of domestic rivals
d)
embargoes quota and quarantine
3.
the main criticisms of tariffs and subsidies as forms of trade barriers are
a)
they encourage inefficiency, increase real price either directly or indirectly and can create trade wars
b)
that they don't work even when the tariff wall is high
c)
they are no longer viable since the WTO has banned all trade protection across the globe
d)
the money raised by tariffs rarely goes to the domestic industries that need bigger subsidies
4.
In the past two decades with the dominance of the ........ school of economic thought and policy , free trade has become more popular
a)
mercantile discountism
b)
comparative advantage
c)
neo classical theory with the emphasis on market forces and competition
d)
keynesian economic policy with the emphasis on government intervention
5.
the concept of free trade means
a)
the reduction of tariffs and subsidies in countries so they are no longer as large as they were in the past
b)
the removal of all trade barriers both direct and indirect to facilitate more efficient use of scarce resources
c)
the free movement of all goods, service , ideas, people, money and technology across the globe
d)
trade which is based on the cheapest prices due to the benefits of perfect competition and economies of scale
6.
the theory of free trade is not a new one - it was created back in the the earliest times of economic thinking by
a)
adam smith
b)
Karl marx
c)
David ricardo
d)
john maynard keynes
7.
the theory he promoted highlighted specialisation , economies of scale and the sale of the surplus on free global markets was called
a)
marshall lerner condition
b)
comparative advantage
c)
pigovian equilibrium
d)
J curve theory
8.
free trade is based on a number of key assumptions
a)
only two countries , goods, one has lower domestic inflation than the other
b)
two countries two goods, both operating on the PPC and no transport costs
c)
a number of countries all completing to ensure the lowest possible cost shown on a supply and demand graph
d)
none of the options are correct
9.
if there were two countries and they used half their resources on either wheat or cars
A 10 1
B 1 15
after free trade what would they be produce
A 10 1
B 1 15
after free trade what would they be produce
a)
A 10 cars B 15 wheat
b)
A 20 wheat and 0 cars
B 0 wheat and 30 cars
B 0 wheat and 30 cars
c)
C A 11 wheat 0 cars
B 0 wheat and 16 cars
B 0 wheat and 16 cars
d)
a total of 16 cars and 11 wheat in the economy
10.
under the theory of comparative advantage
a)
each country would specialise on what they do best -
b)
each country wouldn't trade because they are independent
c)
each country would sell more poor quality goods overseas and keep the best production for home
d)
the country that was less efficient could still benefit by producing goods they have a lower opportunity cost
11.
the main advocate of free trade in the world today is
a)
GATT
b)
World trade forum
c)
UN
d)
WTO
12.
the main benefits of free trade include
a)
peace , better choice , prices and quality
b)
less imports because they cant penetrate strong markets
c)
the sharing of the world s resources
d)
greater benefits for less developed economies as they can trade more
13.
the WTO has struggled to get all of the countries to agree to the concept of free trade , so in recent decades the emphasis has been on
a)
creating common markets
b)
giving upon free free trade because its so hard to achieve
c)
bilateral free trade agreements
d)
multilateral multinational collusion
14.
an example of such an FTA was to be the
a)
TPP
b)
ACCC
c)
EU
d)
IMF
15.
the main benefits of the TPP was
a)
reduction of domestic subsidies to allow other countries entry into australian markets
b)
access to more overseas markets with out the tariffs that had blocked australian exports
c)
world peace , love and understanding
d)
greater economic power for the pacific region and the ability to stop the EU taking over
16.
opponents of the TPP argue that
a)
all tariffs will not be removed in all industries and the gains are very selective
b)
too many of the benefits go to the smaller countries in the TPP
c)
agricultural markets will not be impacted at all by the TPP and it will focus on manufacturing
d)
it highlights the folly of losing the car industry just as the pacific market opens uo and we could have sold our cheaper cars
17.
other opponents critics the TPP because
a)
it prevents trade with other countries who are not in TPP -
b)
it will be a closed economic system not an open global system
c)
without America it wont have the security and good will to join together
d)
the main benefits are flowing to the richer countries and smaller countries like Australia will get less than they hoped in the negotiations
18.
a major problem facing free trade after the GFC has been
a)
the resurgence of nationalism and the unwillingness of people to buy goods from other countries
b)
the increased cyclical and structural unemployment has seen a return to trade protection as a way of achieving full employment goal
c)
deflation has meant the low prices have made the costs of trade barriers less effective
d)
the dominance of multinational corporation exploiting FTA and guaranteeing huge profits
19.
in conclusion free trade can be argued to be
a)
an oversimplistic theory that has little relevance to the real world
b)
a powerful theory but less effective in the real world where economic power corrupts the ideal
c)
a good idea and being accepted globally so in the near future free trade will guarantee a better world
d)
a long term solution to the flaws of gar demand side policy
20.
what is missing from this essay exemplar
a)
examples
b)
economic terminology
c)
economic diagrams and stats
d)
relevance to the question
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