Excellent Political Economy Of International Trade Test - 93+ MCQs: Political Economy of International Trade test: Assess Your Knowledge with Trade Questions and Answers

1. What is the purpose of a trade agreement?

To reduce trade barriers and promote economic cooperation

To protect domestic industries from foreign competition

To increase tariffs on imported goods

To restrict the flow of capital across borders

2. What is the relationship between trade and human rights?

Trade can have implications for human rights, particularly in countries with poor labor and environmental standards

Trade has no impact on human rights

Trade always promotes human rights

Trade is detrimental to human rights

3. How does trade impact income inequality?

Trade reduces income inequality

Trade increases income inequality

Trade has no impact on income inequality

Trade only benefits the wealthy

4. Which of the following trade theories suggests that countries should focus on producing goods in which they have an absolute advantage?

Mercantilism

Absolute Advantage

Comparative Advantage

Heckscher-Ohlin Theory

5. Which trade theory suggests that countries should specialize in producing goods in which they have a comparative advantage?

Mercantilism

Absolute Advantage

Comparative Advantage

Heckscher-Ohlin Theory

6. What is foreign direct investment (FDI)?

Investment in a foreign country that involves ownership or control of a business

Investment in a foreign country that does not involve ownership or control of a business

Investment in the domestic market by foreign companies

Investment in the domestic market by domestic companies

7. How does trade impact economic growth?

Trade promotes economic growth

Trade hinders economic growth

Trade has no impact on economic growth

Economic growth only benefits developed countries

8. What is a quota?

A limit on the quantity of imported goods

A limit on the quantity of exported goods

A tax imposed on imported goods

A subsidy given to domestic producers

9. What is a trade deficit?

When a country's imports exceed its exports

When a country's exports exceed its imports

When a country's trade is balanced

When a country's trade is in equilibrium

10. Which international trade agreement aims to promote free trade by reducing barriers to trade and eliminating tariffs?

World Trade Organization (WTO)

North American Free Trade Agreement (NAFTA)

European Union (EU)

Trans-Pacific Partnership (TPP)

11. What is the relationship between trade and foreign direct investment (FDI)?

Trade promotes foreign direct investment

Trade hinders foreign direct investment

Trade has no impact on foreign direct investment

Foreign direct investment only benefits multinational corporations

12. What is the purpose of a tariff?

To promote free trade

To reduce trade deficits

To protect domestic industries

To encourage foreign investment

13. Which of the following trade policies aims to promote the growth of domestic industries by encouraging the substitution of imported goods with domestically produced goods?

Import Substitution

Export Promotion

Trade Liberalization

Dumping

14. What is protectionism?

The policy of promoting free trade

The policy of imposing tariffs and other barriers to trade

The policy of reducing government intervention in trade

The policy of promoting international cooperation

15. What is the relationship between trade and intellectual property?

Trade agreements often include provisions for protecting intellectual property rights

Trade has no impact on intellectual property

Trade always leads to the infringement of intellectual property rights

Trade is detrimental to innovation and creativity

16. What is the term used to describe the process of increasing interconnectedness and interdependence among countries through the exchange of goods, services, capital, and ideas?

Globalization

Protectionism

Isolationism

Regionalism

17. Which international trade agreement aims to promote free trade by reducing barriers to trade and investment?

World Trade Organization (WTO)

North American Free Trade Agreement (NAFTA)

European Union (EU)

Trans-Pacific Partnership (TPP)

18. Which of the following trade agreements aims to promote economic integration among countries in North America?

NAFTA

ASEAN

MERCOSUR

19. Which of the following trade theories suggests that countries will specialize in producing and exporting goods that require abundant factors of production?

Mercantilism

Absolute Advantage

Comparative Advantage

Heckscher-Ohlin Theory

20. What is the main principle of comparative advantage in international trade?

Countries should specialize in producing goods they can produce most efficiently

Countries should focus on producing goods they can sell at the highest price

Countries should protect their domestic industries from foreign competition

Countries should only trade with their closest neighbors

21. What is the term used to describe the increasing interconnectedness and interdependence of countries through the exchange of goods, services, information, and ideas?

Globalization

Isolationism

Protectionism

Nationalism

22. What is the relationship between trade and exchange rates?

Trade can influence exchange rates through supply and demand for currencies

Trade has no impact on exchange rates

Trade always leads to fixed exchange rates

Trade is detrimental to currency stability

23. What is the term used to describe the practice of a country selling goods and services to other countries at a lower price than its production cost?

Dumping

Subsidies

Anti-dumping

Dumping Duties

24. Which of the following is an example of a trade barrier that protects domestic industries from foreign competition?

Export subsidy

Tariff

Embargo

Import quota

25. What is the relationship between trade and national security?

Trade can have implications for national security, particularly in strategic industries

Trade has no impact on national security

Trade always threatens national security

Trade is detrimental to military capabilities

26. What is the main objective of trade policies?

To promote domestic industries

To restrict imports

To achieve trade surplus

To reduce trade barriers

27. Which theory of international trade argues that countries should specialize in producing goods in which they have a comparative advantage?

Mercantilism

Absolute Advantage

Comparative Advantage

Factor Proportions Theory

28. What is the relationship between trade and poverty?

Trade can contribute to poverty reduction by promoting economic growth and employment

Trade has no impact on poverty

Trade always leads to increased poverty

Trade is detrimental to poverty reduction

29. What is the relationship between trade and regional integration?

Trade can promote regional integration through the establishment of common markets and economic unions

Trade has no impact on regional integration

Trade always hinders regional integration

Trade is detrimental to regional stability

30. Which of the following trade policies aims to promote the growth of domestic industries by encouraging foreign direct investment (FDI) and the establishment of multinational corporations (MNCs)?

Export Promotion

Import Substitution

Trade Liberalization

Foreign Direct Investment

31. Which international organization is responsible for setting global trade rules and resolving trade disputes?

World Trade Organization (WTO)

International Monetary Fund (IMF)

World Bank

United Nations (UN)

32. Which of the following trade policies aims to promote the growth of domestic industries by restricting imports through quotas or licensing requirements?

Import Substitution

Export Promotion

Trade Liberalization

Dumping

33. What is the role of trade in economic development?

Trade can promote economic growth, create jobs, and reduce poverty

Trade can hinder economic growth, lead to job losses, and increase poverty

Trade has no impact on economic development

Trade can lead to economic instability and financial crises

34. What is economic globalization?

The increasing integration and interdependence of national economies

The process of reducing government intervention in the economy

The promotion of economic development through trade and investment

The regulation of international trade and financial flows

35. Which of the following trade policies aims to reduce trade barriers and promote the free flow of goods and services between countries?

Free Trade

Protectionism

Import Substitution

Trade Liberalization

36. What is the relationship between trade and public health?

Trade promotes public health

Trade hinders public health

Trade has no impact on public health

Trade only benefits pharmaceutical companies

37. Which theory of international trade suggests that countries should specialize in producing goods and services in which they have a comparative advantage?

Mercantilism

Absolute advantage

Comparative advantage

Factor proportions theory

38. What is the relationship between trade and financial markets?

Trade can affect financial markets through the flow of capital and exchange rate fluctuations

Trade has no impact on financial markets

Trade always destabilizes financial markets

Trade is detrimental to financial stability

39. What is the relationship between trade and economic development?

Trade can contribute to economic development by promoting growth and specialization

Trade has no impact on economic development

Trade hinders economic development by displacing domestic industries

Trade is only beneficial for developed countries

40. What is the World Trade Organization (WTO) responsible for?

Promoting free trade and resolving trade disputes

Implementing trade barriers and protecting domestic industries

Negotiating bilateral trade agreements

Providing financial aid to developing countries

41. What is the impact of globalization on international trade?

Increased trade flows

Greater economic interdependence

Cultural homogenization

All of the above

42. What are intellectual property rights (IPRs) in the context of international trade?

Rights granted to inventors and creators to protect their inventions and creations

Rights granted to governments to control the import and export of intellectual property

Rights granted to multinational corporations to monopolize the market

Rights granted to consumers to access intellectual property for free

43. Which of the following trade policies aims to promote the growth of domestic industries by reducing or eliminating trade barriers and promoting the free flow of goods and services?

Trade Liberalization

Protectionism

Import Substitution

Export Promotion

44. How does trade impact gender equality?

Trade promotes gender equality

Trade hinders gender equality

Trade has no impact on gender equality

Trade only benefits men

45. How does trade impact cultural diversity?

Trade promotes cultural diversity

Trade hinders cultural diversity

Trade has no impact on cultural diversity

Trade only benefits dominant cultures

46. What is the World Trade Organization (WTO)?

An international organization that promotes free trade and resolves trade disputes

An international organization that promotes protectionism and regulates trade

An international organization that promotes economic development through trade

An international organization that promotes fair trade and labor rights

47. What is the term used to describe the study of the interaction between politics and economics in the context of international trade?

Political Economy

International Relations

Economic Policy

Trade Theory

48. What is the relationship between trade and labor rights?

Trade promotes labor rights

Trade hinders labor rights

Trade has no impact on labor rights

Trade only benefits employers

49. Which of the following trade theories suggests that countries should specialize in producing goods in which they have a comparative advantage?

Mercantilism

Absolute Advantage

Comparative Advantage

Heckscher-Ohlin Theory

50. What is the balance of trade?

The difference between a country's exports and imports

The total value of a country's exports

The total value of a country's imports

The difference between a country's GDP and GNP

Political Economy of International Trade MCQ Test 1