International Economics One Mark Online Test

International Economics One Mark Online Test (12th Standard Economics)

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Trade between two countries is known as ____________ trade

A.External B.Internal C.Inter-regional D.Home

Which of the following factors influence trade?

A.The stage of development of a product B.The relative price of factors of productions C.Government D.All of the above

International trade differs from domestic trade because of

A.Trade restrictions B.Immobility of factors C.Different government policies D.All the above

In general, a primary reason why nations conduct international trade is because

A.Some nations prefer to produce one thing while others produce another B.Resources are not equally distributed among all trading nations C.Trade enhances opportunities to accumulate profits D.Interest rates are not identical in all trading nations

Which of the following is a modern theory of international trade?

A.Absolute cost B.Comparative cost C.Factor endowment theory D.None of these

Exchange rates are determined in

A.Money market B.Foreign exchange market C.Stock market D.Capital market

Exchange rate for currencies is determined by supply and demand under the system of

A.Fixed exchange rate B.Flexible exchange rate C.Constant exchange rate D.Government regulated exchange rate

Net export equals ______

A.Export x Import B.Export + Import C.Export - Import D.Exports of services only

Who among the following enunciated the concept of single factoral terms of trade?

A.Jacob Viner B.G.S. Dorrance C.Taussig D.J.S. Mill

Q10

Terms of Trade of a country show _______________

A.Ratio of goods exported and imported B.Ratio of import duties C.Ratio of prices of exports and imports D.Both (a) and (c)

Q11

Favourable trade means value of exports are ________ than that of imports.

A.More B.Less C.More or Less D.Not more than

Q12

If there is an imbalance in the trade balance (more imports than exports), it can be reduced by

A.decreasing customs duties B.increasing export duties C.stimulating exports D.stimulating imports

Q13

BOP includes

A.visible items only B.invisible items only C.both visible and invisible items D.merchandise trade only

Q14

Components of balance of payments of a country include

A.Current account B.Official account C.Capital account D.All of above

Q15

In the case of BOT,

A.Transactions of goods are recorded. B.Transactions of both goods and services are recorded. C.Both capital and financial accounts are included. D.All of these

Q16

Tourism and travel are classified in which of balance of payments accounts?

A.merchandise trade account B.services account C.unilateral transfers account D.capital account

Q17

Cyclical disequilibrium in BOP occurs because of

A.Different paths of business cycle B.The income elasticity of demand or price elasticity of demand is different C.long-run changes in an economy D.Both (a) and (b)

Q18

Which of the following is not an example of foreign direct investment?

A.the construction of a new auto assembly plant overseas B.the acquisition of an existing steel mill overseas C.the purchase of bonds or stock issued by a textile company overseas D.the creation of a wholly owned business firm overseas

Q19

Foreign direct investments not permitted in India

A.Banking B.Atomic energy C.Pharmaceutical D.Insurance

Q20

Benefits of FDI include, theoretically

A.Boost in Economic Growth B.Increase in the import and export of goods and services C.Increased employment and skill levels D.All of these

Q21

Which branch of economics is primarily concerned with the economic interdependence among nations and the entire range of cross-border transactions?

A.Development Economics B.International Economics C.Fiscal Economics D.Monetary Economics

Q22

The subject matter of International Economics is divided into several segments. Under which segment are issues of tariffs, protection, and exchange control analyzed?

A.Pure Theory of Trade B.Policy Issues C.International Cartels D.Trade Blocs

Q23

According to the comparative differences between domestic and foreign trade, which of the following is a characteristic of internal trade?

A.High immobility of labor and capital B.High restriction of goods through quotas and tariffs C.Multiple currencies in circulation D.Free movement of factors of production across regions

Q24

Adam Smith's theory of absolute cost advantage operates under several simplified assumptions. Which of the following is one of these assumptions?

A.High transportation costs between nations B.Multiple factors of production including capital C.Labor is the only factor of production D.Heterogeneous labor units

Q25

According to David Ricardo's theory of comparative cost advantage, a country should specialize in and export the commodity in which its:

A.Absolute cost of production is the highest B.Comparative cost disadvantage is the least C.Nominal exchange rate is at purchasing power parity D.Factor intensity matches its capital abundance

Q26

The modern theory of international trade, developed by Eli Heckscher and Bertil Ohlin, attributes the primary cause of comparative cost differences to differences in:

A.Labor productivity and efficiency of workers B.National income levels and purchasing power C.Factor endowments and factor intensities D.Transportation networks and shipping speeds

Q27

The concept of Net Barter Terms of Trade, which measures the ratio of the export price index to the import price index, was developed by which economist in 1927?

A.Jacob Viner B.G.S. Dorrance C.David Ricardo D.Frank Taussig

Q28

Which concept of terms of trade adjusts the commodity terms of trade for changes in the productivity of a country's export industries?

A.Gross Barter Terms of Trade B.Income Terms of Trade C.Single Factoral Terms of Trade D.Double Factoral Terms of Trade

Q29

The Balance of Trade differs from the Balance of Payments because the Balance of Trade:

A.Records transactions of both visible and invisible items B.Includes capital transfers and foreign direct investments C.Considers only the export and import of physical commodities D.Is always kept in perfect equilibrium by central banks

Q30

Which type of Balance of Payments disequilibrium is caused by deep-seated, long-run structural shifts in an economy as it progresses from one stage of economic growth to another?

A.Cyclical disequilibrium B.Secular disequilibrium C.Temporal disequilibrium D.Frictional disequilibrium

Q31

Devaluation is a deliberate policy tool used to correct Balance of Payments deficits. In which of the following years was the Indian Rupee devalued?

A.1956 B.1966 C.1980 D.2016

Q32

Which economist defined the equilibrium exchange rate as that rate which, over a certain period of time, keeps the balance of payments in equilibrium?

A.Ragnar Nurkse B.Adam Smith C.Jacob Viner D.Irving Fisher

Q33

If the bilateral nominal exchange rate is 'e', the domestic price level is 'P', and the foreign price level is 'Pf', how is the Real Exchange Rate calculated?

A.e multiplied by P divided by Pf B.e multiplied by Pf divided by P C.e divided by the sum of P and Pf D.the sum of e and P divided by Pf

Q34

Which of the following is a primary characteristic of Foreign Portfolio Investment (FPI) that distinguishes it from Foreign Direct Investment (FDI)?

A.It involves long-term ownership of physical factories B.It is motivated primarily by short-term profit and does not seek management control C.It requires complete technology transfer to the host country D.It is strictly prohibited in the financial and banking sectors

Q35

Under India's current foreign direct investment policies, in which of the following sectors is FDI completely prohibited?

A.Pharmaceuticals B.Telecommunications C.Atomic energy D.Hospitality and tourism

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About this International Economics test

This free online practice test covers International Economics from the 12th Standard Economics (Samacheer Kalvi) syllabus. Choose the number of questions and an optional time limit, then answer and submit — everything is checked in your browser, with the correct answers and a worked explanation shown at the end. For the full solutions to every question in this set, see the solved MCQs page.

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