Business Economics MCQs [set-7]

151. The ratio of price of export to price of import is called

A. Import price
B. Export rate
C. Foreign exchange
D. Terms of trade
Answer: D

152. Px / Pm is
A. Gros barter terms of trade
B. Net Barter terms oftrade
C. Terms of trade
o m
D. Commodity terms of trade . c
Answer: C
te
aterms of trade is expresed as _ of its
M
153. When many commodities are traded
q
export pricr to import price
c
A. sum
B. multiple
M
C. index ratio
D. index
Answer: C

154. If import prices rse more than export prices, terms of trade have _
A. improved
B. deteriorated
C. increased
D. advanced
Answer: B

155. The limitations of Commodty terms of trade gave rise to _

A. Net barter terms of trade
B. gross barter term of trade
 C. single factoral terms of trade
D. double fctoral terms of trade
Answer: B

156. A favourable terms of trade indicates _ imports for given exports

A. more
B. less
C. lower
D. same
Answer: A

157. is equally important as price of exports

A. Income from exports
B. Production level of exports
C. amount of labor fromexports
D. raw materials used for exports
Answer: A

158. A decline in price would increase exports if demand is__

A. inelastic
B. elastic
C. constant
D. fluctuating
Answer: B

159. _ _ introduced the concept of Gross barter terms of trade

A. Adam Smith
B. Alfred Marshall
C. F W Taussig
D. David Ricardo
Answer: C

160. Single factoral terms of trade take in to account

A. Export and import prices
B. Changes in efficiency of factors producing export goods
C. Changes in demand for imports
D. Changes in demand for exports
Answer: B

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161. Two countries can gain from foreign trade if
A. Cost ratios are different
B. Price ratios are different
C. Both cost ratios and price ratios are different
D. Tarifs are different
Answer: C

162. J.S.Mill brought in _ factor to explain termsof trade

A. cost
B. demand
C. supply
D. quality
Answer: B

163. Reciprocal demand is

A. Mutual demand of two countries to each other’s goods
B. Mutual supply
C. price of export and import
D. Investment
Answer: A

164. The developing Countries it is argued usually

A. Enjoy Favourable terms of trade
B. Suffers from adverse terms of trade
C. have better income terms of trade
D. have better bargaining power
Answer: B

165. Comparative advantage occurs when ……..than other country .

A. A country has more population
B. A country can produce more goods
C. A country has a lower opportunity cost in the production of a good
D. A country has more product lines
Answer: C

166. A tariff------
A. Increases the volume of trade

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 B. Reduces the volume of trade
C. Has no effect on the volume of trade
D. encourages foreign goods
Answer: B

167. Terms of trade of less developed countries are generally unfavourable because
A. They export primary goods
B. They export capital goods
C. They export few goods
D. They import few goods
Answer: A

168. According to J S Mill, equilibrium terms of trade is determined by __ demand

A. Market
B. Aggregate
C. Effective
D. Reciprocal
Answer: D

169. Marshall and Edgeworth introduced a geometrical device to explain the gains
from trade which is known as
A. Indifference cur
B. Offer curve
C. Isoquant
D. Demand curve
Answer: B

170. The concept of offer curves is associated with the names of

A. David Ricardo
B. J S Mill and Alfred
C. Alfred Marshall an
D. Edgeworth and Pareto
Answer: C

171. The offer curve of a country is based on

A. Relative prices
B. Price of exports

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 C. Price of imports
D. Volume of exports
Answer: A

172. Reciprocal demand is

A. Mutual supply
B. Ratio of volume of
C. Ratio of earnings f
D. Mutual demand of tw
Answer: D

173. In a free world in which no restrictions exist, international trade will lead to
A. Reduced real li
B. Reduced efficiency
C. Reduced real GDP
D. Increased efficiency
Answer: D

174. A commercial policy is a government policy related to _.

A. Commercial transactions of private companies
B. Economic transactions across international borders
C. Commercial transactions of developed countries
D. Taxes
Answer: B

175. The classical economist Adam Smith was a champion of _ .

A. Protectionism
B. Free Trade
C. Trade Wars
D. Intra indstry trade
Answer: B

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