WorksheetsInternational Trade 2
Total questions: 23
Worksheet time: 12mins
1. What are the distinctive features of international trade, compared to domestic trade?
a. The goods and services exchange activities occur among different countries
b. The payment involves different currencies, and then exchange rate is important
c. International trade is riskier and more complex
d. All are correct
2. Trade surplus occurs when
a. a country's exports exceed its imports
b. a country's imports exceed its exports
c. a country's exports equal its imports
d. a country experiences a negative balance of trade
3. Gravity model postulates that, other things equal, the ... and the ... the two nations are, the ... the volume of trade between them is expected to be.
a. smaller, further, larger
b. larger, closer, larger
c. larger, further, smaller
d. smaller, closer, smaller
4. Which of the following is NOT a current development trend of international trade?
a. Products traded on the world market become more diversified and have shorter life cycles.
b. The share of agricultural trade has risen on the world marketplace.
C. The role of trade in services has risen in the international market.
d. The level of competition among nations and enterprises are getting fiercer.
6. Which of the following will be the lowest barrier on imports of an $800 computer?
a. a specific $30 tariff
b. an ad-valorem 5% tariff
c. a compound duty of $2 and 5%
d. a compound duty of $5 and 3%
7. Which of the following is NOT the arguments that support free trade?
a. market failure argument
b. efficiency argument
c. rent seeking argument
d. dynamic benefits argument
8. An important difference between tariffs and quotas is that tariffs
a. raise the price of the good
b. generate tax revenue for the government
c. stimulate international trade
d. help domestic producers
9. The difficulties for the General Agreement on Trade and Tariffs (GATT) in the late 1970s and early 1980s was
a. GATT Scope of trade barriers was wider than the scope of trade barriers in practice
b. GATT regulated both trade in goods and services while trade in services was not developed in this period
c. GATT regulated agricultural trade that was sensitive and caused many disputes, thus GATT was inefficient in governing global trade
d. GATT dispute settlement was not adequate
10. Which of the following is NOT a condition for imposing countervailing duties?
a. There is a subsidy action
b. Subsidy margin must be deminimis
c. Domestic industry suffers from material injury
d. There if a causal relationship between subsidy action and the material injury to the domestic industry
12. The disappointment with import-substitution policies is in part because
a. Many countries pursuing this strategy experienced stagnation in their growth.
b. the rapid and continuous growth record of South American countries.
c. this policy is inconsistent with sophisticated economic growth models.
d. this policy tended to create world-class industrial competitors.
13. The infant industry argument is the principal justification for
a. import-substitution policies.
b. export-oriented policies.
c. strategic trade policies.
d. industrial policies.
14. If firms in an industry are generating knowledge that other firms can use without paying for it, this industry should be
a. protected.
subsidized
c. imposed import quota
d. imposed local content requirement
15. The WTO's principle of Most Favored Nation (MFN) means
a. to treat a member country more preferentially than others.
b. equal treatment between goods produced domestically and abroad.
c. equal treatment between all WTO members.
d. no discrimination between developed and developing member countries
16. Suppose that there are two factors, capital and land, and that Russia is relatively land endowed while the UK is relatively capital-endowed. According to the Heckscher-Ohlin model,
a. All capitalists in both countries should support free trade.
b. All landowners in both countries should support free trade.
c. British landowners should support Russia-UK free trade.
d. British capitalists should support Russia-UK free trade
17. If ………… occurs when cost per unit of output depends on the size of the industry.
a. The rise in terms of trade
b. Internal economies of scales
c. Imperfect competition
d. External economies of scales
18. When justifying whether a government should subsidize high technology industries, the following should NOT be taken into consideration:
a. The industry is infant.
b. The ability of governments to subsidize the right activity.
c. The economic importance of externalities.
d. Externalities may occur across countries.
19. Regarding the product "pet bottle", what is SPS among the following?
a. The shape of the bottle.
b. The labelling requirements.
c. The use of non-toxic material.
d. The packaging requirements
20. The growth success of the high-performance Asian economies
a. supports the belief that economic development requires import substitution policies
b. rejects the belief that export-oriented industrialization is likely to promote economic development
c. rejects the belief that economic development requires import substitution policies
d. suggests that free trade policies are required for successful economic development
21. Comparative Advantage Theory supports the idea that
a. a country will specialise in producing a good that has a lower opportunity cost
b. a country will specialise in producing a good that has a higher productivity
c. a country will specialise in producing a good that has a lower production cost
d. a country should import the product with comparative advantage
22. The entertainment industry in the US is concentrated in Hollywood. This is an example of
a. internal economies of scale
b. external economies of scale
c. constant returns to scale
d. none of the above
23. The World Trade Organization (WTO) was organized as a successor to the
IMF
UN
UNCTAD
GATT
24. Free trade will help enhance efficiency of the economy because if trade distortions such as tariffs are dismantled and removed,
a. government tariff revenue will decrease, and therefore national economic welfare will decrease.
b. rent-seeking activities will reduce, and therefore resources will be used more
c. deadweight losses for producers will decrease and deadweight losses for consumers will increase, hence increasing national economic welfare.
d. deadweight losses for producers and consumers will decrease, hence decreasing national economic welfare.
25. Which of the following is NOT true related to AEC 2015?
a. Pillar 1 of the ASEAN Economic Community (AEC) is A single production base and market. Pillar 1 refers to the free movement of goods, free movement of services, free movement of capital and investment, and free movement of unskilled workers.
b. Pillar 2 of the ASEAN Economic Community (AEC) is A competitive sector. Pillar 2 includes competition policy, consumer protection and e-commerce development.
c. Pillar 3 of the ASEAN Economic Community (AEC) is An equitable economic development. Pillar 3 includes the development of small and medium enterprises and ASEAN Integration Initiatives.
d. Pillar 4 of the ASEAN Economic Community (AEC) is Integration into the global economy. Pillar 4 refers to economic cooperation with extra-region partners and increasing ASEAN's participation in the global supply chain.
