Practice Test

Q1) A commercial policy is a government policy related to _____ Show Answer

Q2) The classical economist Adam Smith was a champion of _____ Show Answer

Q3) The origin of protectionist policy can be traced back to ______ Show Answer

Q4) Infant Industry Argument is justified for Show Answer

Q5) Pick out the wrong statement Show Answer

Q6) Pick out the wrong statement Show Answer

Q7) Economic integration means Show Answer

Q8) ____ is the highest form of economic integration Show Answer

Q9) The European Economic Community (EEC) was founded in 1957 under the treaty of ______ Show Answer

Q10) Pick out the feature which does not describe European Union Show Answer

Q11) European union was initially formed with ______ European countries Show Answer

Q12) Prime Minister ______ announced the government’s intention that U.K. will not seek permanent membership of the European single market or the EU customs union after leaving the EU. Show Answer

Q13) The referendum for Brexit was held on _____ Show Answer

Q14) The full form of ASEAN is______ Show Answer

Q15) ASEAN was formed with the signing of ______ Show Answer

Q16) Which one of the following is not an objective of commercial trade policy? Show Answer

Q17) Pick out the wrong statement Show Answer

Q18) Which one of the following is an argument for free trade? Show Answer

Q19) Which of the following is an argument against the policy of free trade? Show Answer

Q20) Protectionist policy Show Answer

Q21) Tariff rate quotas are Show Answer

Q22) A tariff expressed as either a specific or an ad valorem rate, whichever is higher, is known as Show Answer

Q23) Countervailing tariffs specifically aim to Show Answer

Q24) A system that makes it mandatory for domestic producers to use some proportion of domestic raw material is known as Show Answer

Q25) Which of the following is not a NTB? Show Answer

Q26) The reduction in domestic consumption due to imposition of quota results in Show Answer

Q27) A preferential trade area is a trade bloc where. Show Answer

Q28) A free trade area is a trade bloc where Show Answer

Q29) A customs union is a trade bloc where Show Answer

Q30) A common or single market is a trade bloc where Show Answer

Q31) ----------- is one of the disadvantages of international economic integration. Show Answer

Q32) The ---------- was signed to create the EU in 1993. Show Answer

Q33) The euro replaced the national currencies of 12 EU member nations in the year Show Answer

Q34) The functioning of the EU single market is governed by Show Answer

Q35) The Eurozone crisis was essentially a ------- crisis. Show Answer

Q36) ASEAN was formed in Show Answer

Q37) The ------- was established in 2015 to bring about economic integration to create a single market in ASEAN. Show Answer

Q38) The aim of ABIF is to establish. Show Answer

Q39) Commercial policy covers tariffs, subsidies and quotas Show Answer

Q40) Subsidizing local industries is a method of protecting trade Show Answer

Q41) Free trade implies government’s increased role Show Answer

Q42) Free trade leads to increase in cost and loss of efficiency Show Answer

Q43) The origin of protection as a policy can be traced to the days of mercantilism Show Answer

Q44) Protectionism fosters patriotism Show Answer

Q45) Employment Argument deals with the loss of employment due to protection Show Answer

Q46) Infant Industry Argument explains the need to expose industries to foreign competition to improve efficiency Show Answer

Q47) Protection enables diversification of industries as per the diversification argument Show Answer

Q48) Tariffs bring about a redistribution of income Show Answer

Q49) Protectionist policy is used to improve a country’s balance of payments. Show Answer

Q50) The consumers are put to double loss due to tariffs Show Answer

Q51) The ultimate effect of non-tariff barriers is different from tariffs Show Answer

Q52) The use of Non-Tariff Barriers have increased sharply after restrictions on tariffs Show Answer

Q53) Some NTBs are permitted to protect health safety or sanitation Show Answer

Q54) Quotas are limits imposed on the physical quantity of import goods Show Answer

Q55) Quotas are imposed for an indefinite period of time Show Answer

Q56) Bilateral quotas removes undesirable effects like excess supply, monopoly in trade, retaliation Show Answer

Q57) In Voluntary Export Restraints, an importing country induces another nation to reduce its exports of a commodity voluntarily Show Answer

Q58) The more integrated the economies become, the more the trade barriers between them Show Answer

Q59) The Economic Union is the highest form of economic integration among the nations Show Answer

Q60) The member states under EU enjoy freedom of movement of people, goods and services Show Answer

Q61) The agreement between six Asian nations paved the way for the formation of EU Show Answer

Q62) Schengen Area is a zone of passport free, borderless travel for people Show Answer

Q63) The U.K.is due to leave EU at midnight on the 31st March, 2020 Show Answer

Q64) The ASEAN was formed with the signing of the Bangkok Declaration in 1967 Show Answer

Q65) The motto of ASEN is “ one vision, one identity, one community.” Show Answer

Q66) The ASEAN charter codifies ASEAN norms rules and values Show Answer

Q67) Commercial trade policy governs a country’s internal trade. Show Answer

Q68) Free trade policy promotes efficiency. Show Answer

Q69) Free trade is not conducive to growth of world economy. Show Answer

Q70) Policy of free trade encourages price rise. Show Answer

Q71) Free trade promotes economic welfare. Show Answer

Q72) Free trade is always advantageous to less developed countries. Show Answer

Q73) Free trade can lead to destruction of domestic industries. Show Answer

Q74) Free trade may cause unbalanced economic development of a country. Show Answer

Q75) Infant industries need protection from foreign competition. Show Answer

Q76) Infant industry argument has no negative effects. Show Answer

Q77) Protectionist policy results in greater diversification of Industries. Show Answer

Q78) Protectionist policy is used to improve a country’s balance of payments. Show Answer

Q79) Protectionist policy results in efficient allocation of resources. Show Answer

Q80) Protectionism is disadvantageous to domestic consumers. Show Answer

Q81) Tariffs are imposed only on imports. Show Answer

Q82) Specific tariffs may not be equitable. Show Answer

Q83) Ad valorem tariffs are less equitable than specific tariffs. Show Answer

Q84) Compound tariff is a combination of both specific and ad valorem tariffs. Show Answer

Q85) Tariffs have protective effect. Show Answer

Q86) Tariffs increase domestic consumption. Show Answer

Q87) Preferential tariff rates are lower than general tariff rates. Show Answer

Q88) Countervailing tariffs and anti-dumping tariffs are the same. Show Answer

Q89) Redistribution effect of tariff is in favour of consumers. Show Answer

Q90) Tariffs make terms of trade favourable to the country imposing the tariff. Show Answer

Q91) Import quotas are more effective than tariffs. Show Answer

Q92) Unilateral quotas may be global or allocated. Show Answer

Q93) Bilateral quotas have greater chance of retaliation by other countries. Show Answer

Q94) Mixing quotas lead to inefficient allocation of resources. Show Answer

Q95) Quotas have terms of trade effect. Show Answer

Q96) Import quotas reduce domestic employment. Show Answer

Q97) Domestic subsidies are a form of NTB. Show Answer

Q98) Administrative barriers make imports easier. Show Answer

Q99) Product and testing standards benefit developing countries. Show Answer

Q100) Exchange controls discourage imports. Show Answer

Q101) Trade blocs promote multilateralism. Show Answer

Q102) WTO is an example of multilateralism. Show Answer

Q103) In a free trade area, selected imported goods from other member nations are exempted from tariffs. Show Answer

Q104) Members of customs unions are free to impose any rate of tariff on imports from countries outside the union. Show Answer

Q105) Arbitrage on import tariffs are not possible for an exporter to a customs union. Show Answer

Q106) Expansion of market size is one of the main objectives of international economic integration. Show Answer

Q107) Regional integration discourages cross-border investment flows between member nations. Show Answer

Q108) There may be local objections to foreign investments in single markets. Show Answer

Q109) The EU is an example of common market. Show Answer

Q110) There are many restrictions on movement of labour between member states of the EU. Show Answer

Q111) The EU seeks to establish a Digital Single Market. Show Answer

Q112) The European Financial Stability Facility had to be established in 2010. Show Answer

Q113) The ASEAN is based on some principles enshrined in the Treaty of Amity and Cooperation in South Asia. Show Answer

Q114) ASEAN has signed many free trade agreements with some of the major Asian nations. Show Answer

Q115) Which one of the following NTBs prevents free movement of capital between countries? Show Answer

Q116) A tax of 20 cents per unit of imported cheese would be an example of a (an): Show Answer

Q117) A tax of 15 percent per imported item would be an example of a (an): Show Answer

Q118) Which trade policy results in the government levying both a specific tariff and an ad-valorem tariff on imported goods: Show Answer

Q119) For advanced countries such as the United States, tariffs on imported raw materials tend to be Show Answer

Q120) Ad valorem tariffs are collected as Show Answer

Q121) Specific tariffs are collected as Show Answer

Q122) Most tariffs have Show Answer

Q123) The effective rate of protection Show Answer

Q124) A foreign-trade zone (FTZ) is Show Answer

Q125) A tariff that prohibits imports has only Show Answer

Q126) If a nation fitting the criteria for the small nation model imposes a 10 percent tariff on imports of autos Show Answer

Q127) According to the __________ argument for protection, tariffs can shield new industries from import competition until they have grown strong and efficient enough to withstand the competition by foreign producers. Show Answer

Q128) The difference between what consumers have to pay for a particular and what they are willing to pay is known as Show Answer

Q129) A tariff can _________ raise a country’s welfare Show Answer

Q130) In developed countries, tariffs on raw materials tend to be Show Answer

Q131) In today’s world, most countries impose tariffs Show Answer

Q132) If a small country imposes a tariff on an imported good, its terms of trade will Show Answer

Q133) If a country an imposes an import tariff, its welfare can improve if Show Answer

Q134) Suppose that the United States imposes a tariff on ballpoint pens of 25 cents per pen plus 12 percent of the pen's value. This is an example of a (an) Show Answer

Q135) A tariff _________ increase a country’ overall welfare. Show Answer

Q136) If no imported inputs (hard-disk drive) go into the domestic production of a final product (desktop computer), then the Show Answer

Q137) If a tariff and import quota lead to equivalent increases in the domestic price of steel, then: Show Answer

Q138) If a tariff and import quota lead to equivalent increases in the domestic price of steel, then: Show Answer

Q139) Under a tariff-rate quota: Show Answer

Q140) Suppose that the domestic government allows a specific number of goods to be imported each year, but it does not specify from where the product is shipped or who is permitted to import.
Such a trade barrier is known as
Show Answer

Q141) Antidumping duties are used to Show Answer

Q142) If import licenses are auctioned off to domestic importers in a competitive market, their scarcity value (revenue effect) accrues to: Show Answer

Q143) Import quotas tend to result in all of the following except: Show Answer

Q144) A tariff-rate quota Show Answer

Q145) If the home country government grants a subsidy on a domestically produced good, domestic producers tend to: Show Answer

Q146) Quotas are government imposed limits on the ____ of goods trade between countries. Show Answer

Q147) ______ are quotas that lead to a complete abolishment of trade. Show Answer

Q148) Similar to import tariffs, import quotas tend to result in Show Answer

Q149) The welfare effects of a quota depend to a considerable extent upon Show Answer

Q150) The home-country government can confiscate the revenue effect of an import quota if Show Answer

Q151) International dumping may involve Show Answer

Q152) Nontariff trade barriers could include all of the following except Show Answer

Q153) A production subsidy that is granted to a producer of an import-competing good Show Answer

Q154) A tariff-rate quota is essentially a Show Answer

Q155) A _______ allows a specified number of goods to be imported each year, and it not specifies from where the product is shipped and who is permitted to import. Show Answer

Q156) Import substitution is an example of Show Answer

Q157) Tariff levels in advanced countries tend to be ________ tariff levels in developing countries. Show Answer

Q158) Economic growth occurs because Show Answer

Q159) Developing countries that concentrate production in agricultural products or raw materials may face a long-run decline in their international terms of trade because of Show Answer

Q160) The _______ pattern of economic growth describes the phenomenon of countries moving up in technological development by following the patterns of countries ahead of them in the development process. Show Answer

Q161) Which of the following organizations primarily provides long-term loans to developing countries to help them develop their infrastructure such as schools, hospitals, and roads? Show Answer

Q162) Poor developing countries typically impose __________ tariffs than rich advanced nations on imports. Show Answer

Q163) The NAFTA is a: Show Answer

Q164) Under the EU’s Common Agricultural Policy, a variable import levy equals the: Show Answer

Q165) Members of the EU find that "trade creation" is fostered when their economies are: Show Answer

Q166) The European Union has achieved all of the following except: Show Answer

Q167) Which country is not a member of the European Union: Show Answer

Q168) The European Union is an example of a/an Show Answer

Q169) Which factor of production in the United States is most likely to be made worse off (its factor payment will decrease) because of the North American Free Trade Agreement? Show Answer

Q170) The implementation of the European Union has: Show Answer

Q171) The Common Agricultural Policy of the European Union has: Show Answer

Q172) As of 2002, the _______ became the official currency union of the European Monetary System: Show Answer

Q173) The European Monetary Union is an example of a Show Answer

Q174) A ___________ is a regional trading bloc in which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not members. Show Answer

Q175) Which level of economic integration best applies to the U.S. economy? Show Answer

Q176) Multinational corporations: Show Answer

Q177) _________ was a strategy for industrial development, popular in Latin America in the 1950s-1960s, for promoting domestic production by erecting high protective tariffs on imports of manufactured goods. Show Answer