The International Economy And Globalization(Economics ) Questions and Answers
Question 1. If goods are exported for less than society’s marginal production cost and the marginal benefit to domestic consumers, it is likely that they benefit from?
an import subsidy
a quota
comparative advantage
an export subsidy
Explanation:-
Answer: Option D. -> an export subsidy NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 2. International difference is opportunity costs lead to countries acquiring ?
Comparative advantage
High exchange rates
trade barriers
trade quotas
Explanation:-
Answer: Option A. -> Comparative advantage NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 3. A tariff causes domestic firms to ________ and consumers to?
overproduce, under consume
Overproduce, overconsume
underproduce, under consume
underproduce, overconsume
Explanation:-
Answer: Option A. -> overproduce, under consume NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 4. Output fell sharply in the transition economies because ?
banks were unable to function
there was little corporate control
vital infrastructure was missing
All of the above
Explanation:-
Answer: Option D. -> All of the above NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 5. The level of the equilibrium exchange rate offsets international differences in ?
comparative advantage
absolute advantage
opportunity cost
relative costs
Explanation:-
Answer: Option B. -> absolute advantage NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 6. LDCs often have a comparative advantage in the production of ?
primary products
intermediate products
manufactured products
financial services
Explanation:-
Answer: Option A. -> primary products NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 7. To prevent the external value of the currency from falling the government might ?
Reduce interest rates
Sell its own currency
Buy its own currency with foreign reserves
Increase its own spending
Explanation:-
Answer: Option C. -> Buy its own currency with foreign reserves NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 8. If a country can produce 10 of product A or 4 of product B the opportunity cost of 1B is ?
0.4A
2.5A
10A
1B
Explanation:-
Answer: Option B. -> 2.5A NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 9. The marginal propensity of consume is equal to ?
Total spending / total consumption
Total consumption / total income
Change in consumption / change in income
Change in consumption / change in savings
Explanation:-
Answer: Option C. -> Change in consumption / change in income NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!
Question 10. The terms of trade measure ?
The income of one country compared to another
The GDP of one country compared to another
The quantity of exports of one country compared to another
Export prices compared to import prices
Explanation:-
Answer: Option D. -> Export prices compared to import prices NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!