15 MCQ on Economic issues: International trade and investment with answers
15 MCQ on Economic issues: International trade and investment with answers
1. Which of the following is an example of a tariff barrier to trade?
A) Import quota
B) Subsidy
C) Voluntary export restraint
D) Import tax
Answer: D) Import tax
2. The World Trade Organization (WTO) aims to:
A) Regulate international currency exchange rates
B) Promote free trade and resolve trade disputes
C) Coordinate global monetary policy
D) Manage international development projects
Answer: B) Promote free trade and resolve trade disputes
3. Which agreement led to the establishment of the European Single Market, eliminating barriers to the free movement of goods, services, capital, and labor within the European Union?
A) NAFTA (North American Free Trade Agreement)
B) ASEAN (Association of Southeast Asian Nations) Free Trade Area
C) Mercosur
D) Treaty of Rome
Answer: D) Treaty of Rome
4. Foreign Direct Investment (FDI) involves:
A) Trade in goods and services between countries
B) Investment in foreign assets such as stocks and bonds
C) Acquisition of a controlling interest in a foreign company
D) Aid provided by one country to another for development purposes
Answer: C) Acquisition of a controlling interest in a foreign company
5. Which organization provides financial assistance and technical expertise to developing countries for development projects?
A) International Monetary Fund (IMF)
B) World Bank
C) World Trade Organization (WTO)
D) United Nations (UN)
Answer: B) World Bank
6. The term "dumping" in the context of international trade refers to:
A) Exporting goods at a price lower than the domestic market price
B) Excessive government subsidies to domestic industries
C) Imposing high tariffs on imported goods
D) Engaging in unfair labor practices
Answer: A) Exporting goods at a price lower than the domestic market price
7. Which of the following is an example of a non-tariff barrier to trade?
A) Quota restrictions
B) Import tax
C) Export subsidy
D) Quality standards
Answer: D) Quality standards
8. The Trans-Pacific Partnership (TPP) was a trade agreement between countries bordering which ocean?
A) Atlantic Ocean
B) Indian Ocean
C) Pacific Ocean
D) Arctic Ocean
Answer: C) Pacific Ocean
9. Which country is the world's largest exporter of goods in terms of value?
A) China
B) United States
C) Germany
D) Japan
Answer: A) China
10. The General Agreement on Tariffs and Trade (GATT) was established in:
A) 1945
B) 1957
C) 1965
D) 1947
Answer: D) 1947
11. The concept of comparative advantage suggests that countries should specialize in producing goods and services:
A) That they can produce most efficiently
B) That are in high demand domestically
C) That are protected by tariffs
D) That are subsidized by the government
Answer: A) That they can produce most efficiently
12. Which term refers to the difference between a country's exports and imports of goods and services?
A) Trade balance
B) Budget deficit
C) Current account
D) National debt
Answer: A) Trade balance
13. The North American Free Trade Agreement (NAFTA) involved the creation of a free trade zone between:
A) United States, Canada, and Mexico
B) United States, Brazil, and Argentina
C) Canada, Mexico, and Chile
D) United States, Canada, and European Union
Answer: A) United States, Canada, and Mexico
14. Which term refers to the total value of all goods and services produced by a country in a specific period?
A) Gross Domestic Product (GDP)
B) Consumer Price Index (CPI)
C) Inflation rate
D) Unemployment rate
Answer: A) Gross Domestic Product (GDP)
15. The concept of trade liberalization advocates for:
A) Increasing barriers to international trade
B) Reducing barriers to international trade
C) Restricting foreign direct investment
D) Imposing quotas on imported goods
Answer: B) Reducing barriers to international trade
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