International Trade: Advantages, Disadvantages, and Global Impact

Question 1

Which of the following is NOT a potential benefit of international trade?

Accepted Answer

Increased unemployment

Answer

Increased consumer choice

Answer

Lower prices

Answer

Increased economic growth

Question 2

The comparative advantage theory suggests that countries should:

Accepted Answer

Produce only goods they can produce more efficiently

Answer

Produce all goods domestically

Answer

Import goods they can produce more efficiently

Answer

Export goods they cannot produce efficiently

Question 3

Which of the following is NOT a factor that can influence trade patterns between countries?

Accepted Answer

Personal preferences

Answer

Geography

Answer

Technology

Answer

Government policies

Question 4

Which of the following is NOT a potential benefit of international trade?

Accepted Answer

Excessive reliance on foreign suppliers

Answer

Enhanced competition and innovation

Answer

Lower prices for consumers

Answer

Increased employment opportunities

Question 5

A tariff is a government-imposed tax on:

Accepted Answer

Imported goods and services

Answer

Exported goods and services

Answer

Domestically produced goods and services

Answer

Investments

Question 6

Which of the following is an example of a non-tariff barrier to trade?

Accepted Answer

Health and safety standards

Answer

Quotas

Answer

Government subsidies

Answer

Currency exchange rates

Question 7

The primary purpose of a quota is to:

Accepted Answer

Limit the quantity of imported or exported goods

Answer

Increase the prices of imported goods

Answer

Protect domestic businesses from foreign competition

Answer

Promote exports

Question 8

Which of the following is a potential negative consequence of unrestricted free trade?

Accepted Answer

Job losses in certain industries

Answer

Increased pollution and environmental damage

Answer

Reduced consumer choice

Answer

Instability in financial markets

Question 9

Which of the following is NOT an objective of the North American Free Trade Agreement (NAFTA)?

Accepted Answer

Establish a common currency

Answer

Eliminate tariffs and other trade barriers

Answer

Increase investment and economic growth

Answer

Protect intellectual property rights

Question 10

The balance of payments is a summary of:

Accepted Answer

All international economic transactions of a country

Answer

Only imports and exports of goods and services

Answer

Only financial flows

Answer

Only government spending

Question 11

Tariffs, a prevalent type of trade barrier, primarily serve to:

Accepted Answer

Elevate the cost of imported products

Answer

Shrink the quantity of imported goods

Answer

Offer subsidies to domestic producers

Answer

Strictly limit the quantity of imported goods

Question 12

Which of the following is a potential drawback associated with free trade agreements?

Accepted Answer

Exacerbated competition for domestic businesses

Answer

Undoubtedly enhanced global economic growth

Answer

Unquestionably improved preservation of the environment

Answer

Inevitable reduction in consumer prices

Question 13

Subsidies, often provided by governments, are primarily intended to:

Accepted Answer

Support and incentivize domestic producers

Answer

Increase the expense of imported goods

Answer

Reduce the demand for domestically produced goods

Answer

Always yield positive outcomes for the economy

Question 14

The World Trade Organization (WTO) is an esteemed international organization dedicated to:

Accepted Answer

Fostering free trade and lessening trade barriers

Answer

Imposing tariffs and quotas for member nations

Answer

Distributing subsidies to developing nations

Answer

Shielding domestic industries from global competition

Question 15

A country's balance of trade encapsulates:

Accepted Answer

The net difference between its exports and imports

Answer

The total monetary value of its صادرات

Answer

The total monetary value of its واردات

Answer

Always a positive value, indicating a trade surplus

Question 16

The concept of absolute advantage suggests that:

Accepted Answer

Nations should specialize in producing goods where they are most efficient

Answer

Nations should strive to produce all goods domestically

Answer

Nations should only import goods that cannot be produced domestically

Answer

Nations must always export more goods than they import

Question 17

Which of the following poses a potential challenge to the realization of free trade?

Accepted Answer

All of the aforementioned potential challenges

Answer

Protectionist policies and sentiments

Answer

Periods of political instability and uncertainty

Answer

Cultural differences and preferences

Question 18

Which of the following is a primary benefit of establishing a common market?

Accepted Answer

Increased trade and economic activity within the member countries

Answer

Lowered consumer prices

Answer

Reduced government involvement in economic affairs

Answer

Enhanced economic growth in non-member countries

Question 19

Which trade barrier type involves imposing a tax on imported goods?

Accepted Answer

Tariff

Answer

Quota

Answer

Subsidy

Answer

Embargo

Question 20

What is the primary objective of a free trade agreement?

Accepted Answer

Eliminating or reducing trade barriers

Answer

Encouraging investment between nations

Answer

Establishing a common currency

Answer

Forming a political union

Question 21

How does an increase in the value of the US dollar affect imports into the United States?

Accepted Answer

Decreased imports

Answer

Increased imports

Answer

No impact

Answer

Depends on the elasticity of supply

Question 22

Which trade theory explains specialization in producing and exporting goods based on comparative advantage?

Accepted Answer

Comparative advantage theory

Answer

Absolute advantage theory

Answer

Factor endowments theory

Answer

Mercantilism

Question 23

Explain the distinction between a tariff and a quota:

Accepted Answer

A tariff is a tax on imports, while a quota limits the quantity of imports.

Answer

A quota is a tax on imports, while a tariff limits the quantity of imports.

Answer

A tariff is a subsidy on exports, while a quota is a tax on imports.

Answer

A quota is a subsidy on exports, while a tariff is a tax on imports.

Question 24

How can governments leverage trade policy to foster economic growth?

Accepted Answer

Reducing trade barriers

Answer

Providing subsidies to domestic industries

Answer

Imposing tariffs on imported goods

Answer

Establishing quotas on imported goods

Question 25

Which type of trade barrier restricts the quantity of a good that can be exported?

Accepted Answer

Quota

Answer

Tariff

Answer

Embargo

Answer

Subsidy

Question 26

What is the main purpose of a subsidy?

Accepted Answer

To increase the supply of a good

Answer

To decrease the demand for a good

Answer

To protect domestic producers from foreign competition

Answer

To generate tax revenue

Question 27

What is the concept of comparative advantage based on?

Accepted Answer

The relative productivity of each country

Answer

The absolute productivity of each country

Answer

The size of each country's population

Answer

The exchange rates between different currencies

Question 28

Which of the following is a major international trade organization?

Accepted Answer

World Trade Organization

Answer

International Monetary Fund

Answer

World Bank

Answer

United Nations

Question 29

The balance of trade is the difference between a country's:

Accepted Answer

Exports and imports

Answer

Total exports

Answer

Total imports

Answer

Net income from international trade

Question 30

A tariff is a tax imposed on:

Accepted Answer

Imported goods

Answer

Exported goods

Answer

Domestically produced goods

Answer

Both imported and domestically produced goods

Question 31

A subsidy is a government payment provided to:

Accepted Answer

Producers of a particular good or service

Answer

Consumers of a particular good or service

Answer

Exporters of a particular good or service

Answer

Importers of a particular good or service

Question 32

The North American Free Trade Agreement (NAFTA) is an example of a:

Accepted Answer

Free trade agreement

Answer

Customs union

Answer

Common market

Answer

Economic union

Question 33

According to the theory of comparative advantage, countries should:

Accepted Answer

Produce goods and services that they can produce most efficiently

Answer

Protect domestic industries from foreign competition

Answer

Specialize in producing goods and services that they cannot produce domestically

Answer

Produce all goods and services domestically

Question 34

Evaluate the potential of international trade to contribute to sustainable development. Consider both its environmental and social implications.

Accepted Answer

International trade can facilitate the transfer of environmentally friendly technologies to developing countries.

Answer

International trade always leads to improved environmental practices worldwide.

Answer

International trade has no significant impact on social welfare issues such as labor standards and working conditions.

Question 35

Trace the historical progression of international trade theories, starting from the mercantilist era and continuing to the present day.

Accepted Answer

Mercantilism -> Physiocrats -> Classical -> Keynesian -> Neoclassical

Answer

Keynesian -> Mercantilism -> Physiocrats -> Neoclassical -> Classical

Answer

Physiocrats -> Classical -> Mercantilism -> Keynesian -> Neoclassical

Answer

Neoclassical -> Keynesian -> Classical -> Mercantilism -> Physiocrats

Question 36

Which of the following is NOT an advantage of international trade?

Accepted Answer

It reduces competition and innovation

Answer

It promotes economic growth

Answer

It fosters cooperation and understanding among nations

Answer

It provides access to a wider range of goods and services

Question 37

What is the primary objective of a free trade agreement (FTA)?

Accepted Answer

To eliminate or reduce trade barriers between participating countries

Answer

To increase tariffs and quotas between participating countries

Answer

To regulate the flow of goods and services between participating countries

Answer

To protect domestic industries from foreign competition

Question 38

Which of the following is a potential benefit of free trade?

Accepted Answer

Increased consumer choice and lower prices

Answer

Increased unemployment

Answer

Lower quality goods

Answer

Reduced government revenue

Question 39

What is the term used to describe the total value of goods and services exported from a country?

Accepted Answer

Exports

Answer

Balance of trade

Answer

Foreign exchange reserves

Answer

Imports

Question 40

What is the primary role of the World Trade Organization (WTO)?

Accepted Answer

To promote free trade and settle trade disputes

Answer

To promote peace and security

Answer

To regulate the global financial system

Answer

To provide humanitarian aid to developing countries

Question 41

Which of the following is a potential disadvantage of international trade?

Accepted Answer

Displacement of domestic jobs in certain industries

Answer

Reduced quality of goods

Answer

Higher prices for consumers

Answer

Slower economic growth

Question 42

What is the term used to describe the difference between a country's exports and imports?

Accepted Answer

Balance of trade

Answer

Foreign exchange rate

Answer

Gross domestic product

Answer

Current account

Question 43

Which of the following is a government policy that aims to restrict international trade?

Accepted Answer

Protectionism

Answer

Free trade

Answer

Mercantilism

Answer

Interventionism

Question 44

Which of the following is an advantage of international trade?

Accepted Answer

Increased consumer choice and access to variety of goods

Answer

Reduced consumer choice

Answer

Higher unemployment

Answer

Lower quality goods

Question 45

What is a trade barrier?

Accepted Answer

A government measure that restricts international trade, such as tariffs, quotas or subsidies

Answer

An agreement between countries to reduce trade

Answer

A tax on imported goods

Question 46

What is the purpose of a free trade agreement?

Accepted Answer

To reduce or eliminate trade barriers between participating countries

Answer

To increase government control over trade

Answer

To protect domestic industries from foreign competition

Question 47

Which of the following is an advantage of free trade?

Accepted Answer

Increased economic growth due to specialization and efficiency

Answer

Higher unemployment

Answer

Reduced innovation

Answer

Lower consumer choice

Question 48

Explain the difference between a tariff and a quota?

Accepted Answer

A tariff is a tax on imports, while a quota is a limit on the quantity of imports that can enter a country.

Answer

A quota is a tax on imports, while a tariff is a limit on the quantity of imports.

Answer

Tariffs and quotas are the same thing.

Question 49

What is a reason for trade protectionism?

Accepted Answer

To protect domestic industries from foreign competition, even if it leads to higher prices for consumers

Answer

To promote free trade

Answer

To increase government revenue

Question 50

What is the main impact of an import tariff on domestic consumers?

Accepted Answer

Higher prices for imported goods

Answer

Lower prices for imported goods

Answer

No change in prices for imported goods

Answer

Increased quantity of imported goods

Question 51

What is a benefit of international specialization?

Accepted Answer

Increased production efficiency and lower costs due to economies of scale

Answer

Higher unemployment

Answer

Lower quality goods

Answer

Reduced consumer choice

Question 52

What is the primary role of the World Trade Organization (WTO)?

Accepted Answer

To facilitate international trade negotiations, enforce trade agreements, and resolve trade disputes

Answer

To negotiate peace treaties between countries

Answer

To regulate international trade and impose tariffs

Answer

To provide financial assistance to developing countries