1.

Whati
sint
ernat
ional
trade?

A.Theex
changeofgoodsandser
vicesbet
weencount
ri
es

B. Theex
changeofgoodsandser
viceswi
thi
nacount
ry

C.Theex
changeofgoodsandser
vicesbet
weencompani
es

ANSWER:
A

2.Whi
choft
hef
oll
owi
ngi
snotabenef
itofi
nter
nat
ional
trade?

A.I
ncr
easedcompet
it
ion

B.Gr
eat
erv
ari
etyofgoodsandser
vices

C.Hi
ghercost
sforconsumer
s

D.AandB

ANSWER:
C

3.Whati
sthemai
npur
poseoft
heWor
ldTr
adeOr
gani
zat
ion(
WTO)
?

A.Topr
omot
eenv
ironment
alpr
otect
ion

B.Topr
omot
efr
eeandf
airt
rade

C.Topr
ovi
deai
dtodev
elopi
ngcount
ri
es

D.Al
l

ANSWER:
B

4.Whi
choft
hef
oll
owi
ngi
sat
radebar
ri
er?

A.Tar
if
fs

B.Fr
eet
radeagr
eement
s

C.For
eigndi
recti
nvest
ment

ANSWER:
A
5.Whati
sthet
heor
ythatsuggest
sthatacount
ryshoul
dspeci
ali
zei
npr
oduci
ng
goodst
hati
tcanpr
oducemor
eef
fi
cient
lyt
hanot
hercount
ri
es,andt
hent
rade
t
hesegoodsf
orgoodst
hatot
hercount
ri
escanpr
oducemor
eef
fi
cient
ly?

A.Absol
uteadv
ant
aget
heor
y

B.Compar
ati
veadv
ant
aget
heor
y

C.Heckscher
-Ohl
i
ntheor
y

D.Newt
radet
heor
y

ANSWER:
B

6.Whati
stheeconomi
cbasi
sbehi
ndt
hecur
rentpol
i
cydebat
eini
nter
nat
ional
economi
cs?

A.Economi
cgr
owt
h

B.Ex
changer
ates

C.Tr
adepr
otect
ioni
sm

D.I
nfl
ati
on

ANSWER:
C

7.Whyi
str
adepr
otect
ioni
sm acont
rov
ersi
ali
ssuei
nint
ernat
ional
economi
cs?

A.I
thasbeenpr
ovent
obei
nef
fect
ivei
nboost
ingt
heeconomy
.

B.I
tleadst
ohi
gherpr
icesf
orconsumer
s.

C.I
tcanr
esul
tinr
etal
i
ati
onf
rom ot
hercount
ri
es.

D.I
tonl
ybenef
it
sasel
ectgr
oupofi
ndust
ri
es.

ANSWER:
C

8. What ar
ethe pot
ent
ialconsequences of a count
ryi
mpl
ement
ing t
rade
pr
otect
ioni
sm pol
i
cies?

A.I
ncr
easei
ndomest
icpr
oduct
ion
 B.Decr
easei
nexpor
ts

C.I
ncr
easei
ntar
if
fsoni
mpor
tedgoods

D.Al
loft
heabov
e

ANSWER:
D

9. Whi
choft
hef
oll
owi
ngi
sanex
ampl
eoft
radepr
otect
ioni
sm pol
i
cy?

A.Remov
ingt
ari
ff
soni
mpor
tedgoods

B.I
mposi
ngquot
asoni
mpor
tedgoods

C.Encour
agi
ngf
reet
radeagr
eement
s

D.Al
l
owi
ngf
orei
gncompani
est
oinv
esti
nthedomest
icmar
ket

ANSWER:
B

10.Whati
sthepur
poseoft
radepr
otect
ioni
sm pol
i
cies?

A.Toi
ncr
easei
mpor
ts

B.Tor
educecompet
it
ion

C.Topr
omot
efr
eet
rade

D.Toencour
agef
orei
gni
nvest
ment

ANSWER:
B

11.Whati
sanex
ampl
eofat
radepr
otect
ioni
sm pol
i
cyt
hatacount
rycanuset
o
pr
otecti
tsdomest
icpr
oducer
s?

A.Remov
ingt
ari
ff
soni
mpor
tedgoods

B. Encour
agi
ngexpor
tsofdomest
icgoods

C.I
mposi
ngquot
asoni
mpor
tedgoods

D.Al
l
owi
ngf
orei
gncompani
est
oinv
esti
nthedomest
icmar
ket

ANSWER:
C
12.
Whati
sthecont
ri
but
ionofi
nter
nat
ional
tradeoneconomi
cdev
elopment
?

A.I
thasnoi
mpactoneconomi
cdev
elopment

B.I
tcanl
eadt
oeconomi
cgr
owt
handdev
elopment

C.I
tcanonl
yleadt
oeconomi
cgr
owt
hbutnotdev
elopment

D.I
tcancauseeconomi
cdecl
i
ne

ANSWER:
B

13.
Whi
choft
hef
oll
owi
ngi
snotanexampl
eofi
nter
nat
ional
trade?

A.)Acompanyi
ntheUni
tedSt
atesbuy
sst
eelf
rom acompanyi
nChi
nat
o
usei
nmanuf
act
uri
ng.

B.)At
our
istf
rom Canadav
isi
tsMexi
coandbuy
sasouv
eni
r.

C.)A per
soni
nJapansendsmoneyt
o af
ami
l
ymemberi
ntheUni
ted
Ki
ngdom.

D.)Acompanyi
nGer
manyi
nvest
sinast
art
upi
nIndi
a.

Answer
:C

14.Whati
sat
radedef
ici
t?

A.Whenacount
ryi
mpor
tsmor
ethani
texpor
ts.

B.Whenacount
ryex
por
tsmor
ethani
timpor
ts.

C.Whenacount
ry'
stot
ali
mpor
tsandexpor
tsar
eequal
.

D.Whenacount
rydoesn'
ttr
adewi
thot
hercount
ri
esatal
l
.

ANSWER:
A

15.Whati
stheI
nter
nat
ional
Monet
aryFund(
IMF)
?

A.Agl
obal
organi
zat
iont
hatpr
omot
esi
nter
nat
ional
tradeandi
nvest
ment
.

B. Abankt
hatpr
ovi
desl
oanst
odev
elopi
ngcount
ri
es.
 C.Anor
gani
zat
iont
hathel
pscount
ri
escoor
dinat
ethei
rmonet
aryandf
iscal
pol
i
cies.

D.Ar
egul
ator
ybodyt
hatov
erseesi
nter
nat
ional
financi
almar
ket
s.

ANSWER:
C

16.
Whati
sthet
erm usedt
odescr
ibet
her
ateatwhi
chonecur
rencyi
sexchanged
f
oranot
hercur
rency
?

A.Ex
changer
ate

B.I
nter
estr
ate

C.I
nfl
ati
onr
ate

D.Noneoft
heabov
e

ANSWER:
A

17.
Whi
choft
hef
oll
owi
ngi
saf
act
ort
hatcani
nfl
uenceex
changer
ates?

A.Pol
i
tical
stabi
l
ity

B.Economi
cper
for
mance

C.Nat
ural
disast
ers

D.Al
loft
heabov
e

ANSWER:
A

18.
Whati
sacur
rencypai
r?

A.Asi
ngl
ecur
rency

B.Acombi
nat
ionoft
wocur
renci
es

C.Abondi
ssuedbyaf
orei
gngov
ernment

D.Noneoft
heabov
e

ANSWER:
B
19.
Whati
sthemostwi
del
ytr
adedcur
rencyi
nthef
orgi
ngex
changemar
ket
?

A.USDol
l
ar

B.Eur
o

C.JapaneseYen

D.Br
it
ishPound

ANSWER:
A

20.
Whi
cht
heor
ysuggest
sthatchangesi
nacount
ry'
sint
erestr
ateswi
l
lcausea
cor
respondi
ngchangei
nit
sex
changer
ate?

A.Pur
chasi
ngPowerPar
it
yTheor
y

B.I
nter
estRat
ePar
it
yTheor
y

C.I
nter
nat
ional
FisherEf
fectTheor
y

D.Monet
aryModel
ofExchangeRat
eDet
ermi
nat
ion

ANSWER:
B

21.
Whati
sthe pr
imar
yfact
ort
hatt
he Monet
ary ModelofEx
change Rat
e
Det
ermi
nat
ionf
ocuseson?

A.Economi
cgr
owt
h

B.I
nfl
ati
on

C.Moneysuppl
y

D.Pol
i
tical
stabi
l
ity

ANSWER:
C

22.
Accor
dingt
othePur
chasi
ngPowerPar
it
yTheor
y,whatshoul
dhappent
othe
exchanger
atebet
weent
wocount
ri
esi
fthepr
icesofgoodsandser
vicesi
none
count
ryi
ncr
easewhi
l
epr
icesi
ntheot
hercount
ryr
emai
nconst
ant
?

A.Theexchanger
atebet
weent
het
wocount
ri
eswi
l
lincr
ease
 B.Theexchanger
atebet
weent
het
wocount
ri
eswi
l
ldecr
ease

C.Theexchanger
atebet
weent
het
wocount
ri
eswi
l
lremai
n

D.Ther
eisnor
elat
ionshi
pbet
weent
het
wo

ANSWER:
B

23.
Whi
choft
hef
oll
owi
ngi
snotacomponentofacount
ry'
sbal
anceofpay
ment
s?

A.Cur
rentaccount

B.Capi
tal
account

C.Fi
nanci
alaccount

D.Tr
adeaccount

ANSWER:
D

24.
Whati
sthedef
ini
ti
onofbal
anceofpay
ment
?

A.Thedi
ff
erencebet
weent
otal
val
ueofex
por
tsandi
mpor
ts

B.Thedi
ff
erencebet
weent
otal
val
ueofi
mpor
tsandi
ncomef
rom expor
ts

C.Thedi
ff
erencebet
weent
otal
val
ueofi
mpor
tsandt
otal
val
ueofexpor
ts

D.Thedi
ff
erencebet
weent
otalv
alueofi
mpor
tsandt
otalv
alueofexpor
tsand
capi
tal
flows

ANSWER:
D

25.
Whati
sthedi
ff
erencebet
weent
hecur
rentaccountandt
hecapi
tal
account
?

A.Thecur
rentaccountr
ecor
dsi
nter
nat
ionalt
radei
ngoodsandser
viceswhi
l
e
t
hecapi
tal
accountr
ecor
dsf
inanci
alf
lows

B.Thecur
rentaccountr
ecor
dsi
nter
nat
ionalt
radei
ngoodsandser
viceswhi
l
e
t
hecapi
tal
accountr
ecor
dsi
nter
nat
ional
inv
est
mentf
lows

C.Thecur
rentaccountr
ecor
dsi
ncomef
lowswhi
l
ethecapi
talaccountr
ecor
ds
capi
tal
flows
 D.Thecapi
talaccountr
ecor
dsi
ncomef
lowswhi
l
ethecur
rentaccountr
ecor
ds
capi
tal
flows

ANSWER:
B

26.
Whati
sthemai
ngoal
ofmacr
oeconomi
cpol
i
cyi
nanopeneconomy
?

A.Tomai
ntai
nlowi
nfl
ati
on

B.Tomai
ntai
nast
abl
eexchanger
ate

C.Bot
haandb

D.Noneoft
heabov
e

ANSWER:
C

27.
Whi
choft
hef
oll
owi
ngi
sat
ool
ofmonet
arypol
i
cyi
nanopeneconomy
?

A.Fi
scal
pol
i
cy

B.I
nter
estr
ateadj
ust
ment
s

C.Taxpol
i
cy

D.Gov
ernmentspendi
ng

ANSWER:
B

28.
Whati
sthemai
nbenef
itofusi
ngf
iscal
pol
i
cyov
ermonet
arypol
i
cyt
ost
abi
l
izean
openeconomy
?

A.Fi
scal
pol
i
cyi
smor
eef
fect
iveatcont
rol
l
ingi
nfl
ati
on

B.Fi
scal
pol
i
cyi
smor
eef
fect
iveatadj
ust
ingt
heexchanger
ate

C.Fi
scal
pol
i
cycanbei
mpl
ement
edmor
equi
ckl
y

D.Noneoft
heabov
e

ANSWER:
B

29.
Whi
choft
hef
oll
owi
ngcount
ri
esi
smostl
i
kel
ytobenef
itf
rom af
lexi
bleexchange
 r
atei
ntheMundel
l
-Fl
emi
ngmodel
?

A.Acount
rywi
thhi
ghcapi
tal
mobi
l
ityandaf
ixedexchanger
ate.

B.Acount
rywi
thl
owcapi
tal
mobi
l
ityandaf
ixedexchanger
ate.

C.Acount
rywi
thhi
ghcapi
tal
mobi
l
ityandaf
lex
ibl
eexchanger
ate.

D.Acount
rywi
thl
owcapi
tal
mobi
l
ityandaf
lex
ibl
eexchanger
ate.

ANSWER:
C

30.Whyi
stheMundel
l
-Fl
emi
ngmodel
alsoknownast
heI
S-LM-
BPmodel
?

A.Because i
tincor
por
ates al
lthr
ee macr
oeconomi
cvar
iabl
es:i
nvest
ment
,
sav
ing,
andbal
anceofpay
ment
s.

B.Becausei
texpl
ainst
her
elat
ionshi
pbet
weeni
nter
estr
ates,exchanger
ates,
andout
puti
nanopeneconomy
.

C.Becausei
tisbasedont
heKey
nesi
ancr
ossmodel
.

D.Becausei
tassumesaf
ixedpr
icel
evel
.

ANSWER:
B

31.
Whati
sthei
mpactofcl
i
mat
echangeont
heeconomy
?

A.I
thasnoi
mpact

B.I
thasaposi
ti
vei
mpact

C.I
thasanegat
ivei
mpact

D.I
tonl
yimpact
scer
tai
nindust
ri
es

ANSWER:
C

32.Whi
choft
hef
oll
owi
ngst
atement
sbestdef
ineseconomi
cgl
obal
i
zat
ion?

A.Thei
ntegr
ati
onofnat
ionaleconomi
esi
ntoagl
obaleconomyt
hrought
rade
andi
nvest
ment
s
 B.Thewi
thdr
awalofcount
ri
esf
rom t
hegl
obaleconomyt
ofocusonnat
ional
i
nter
est
s

C.Thecr
eat
ionofasi
ngl
e,uni
ver
sal
cur
rency

D.Thedomi
nat
ionofonecount
ry'
seconomyov
erot
her
s

ANSWER:
A

33.Agov
ernmenti
mposesat
ari
ffoni
mpor
tedgoodst
opr
otectdomest
ici
ndust
ri
es.
Thi
sisanex
ampl
eof
:

A.Fr
eet
rade

B.Pr
otect
ioni
sm

C.Economi
cint
egr
ati
on

D.Capi
tal
i
sm

ANSWER:
B