International Trade MCQS with Answers

Question 1

International trade is primarily based on the principle of:

Accepted Answer

Comparative advantage

Answer

Absolute advantage

Answer

Equal advantage

Answer

Monopoly

Question 2

A tax imposed on imported goods is called a:

Accepted Answer

Tariff

Answer

Quota

Answer

Subsidy

Answer

Embargo

Question 3

The term 'Balance of Trade' refers to:

Accepted Answer

The difference between exports and imports of goods

Answer

The difference between total taxes and total expenditures

Answer

The exchange rate of currencies

Answer

The total foreign exchange reserves

Question 4

Which international organization is primarily responsible for regulating global trade?

Accepted Answer

World Trade Organization (WTO)

Answer

World Bank

Answer

International Monetary Fund (IMF)

Answer

United Nations (UN)

Question 5

When a country's imports exceed its exports, it has a:

Accepted Answer

Trade deficit

Answer

Trade surplus

Answer

Balanced trade

Answer

Favorable balance of payments

Question 6

Dumping in international trade refers to:

Accepted Answer

Selling goods in a foreign market at a price below their cost of production

Answer

Disposing of toxic waste in foreign countries

Answer

Exporting low-quality goods

Answer

Refusing to trade with a specific country

Question 7

An 'Embargo' is:

Accepted Answer

A complete ban on trade with a particular country

Answer

A trade agreement between two countries

Answer

A tax on exports

Answer

A subsidy given to exporters

Question 8

FDI is an important component of which account in the Balance of Payments?

Accepted Answer

Capital Account

Answer

Current Account

Answer

Official Reserve Account

Answer

Trade Account

Question 9

A 'Quota' in international trade is:

Accepted Answer

A limit on the physical quantity of goods that can be imported

Answer

A tax on imported goods

Answer

A quality standard for exports

Answer

A guarantee of fixed exchange rates

Question 10

Which theory suggests that a country will export goods that make intensive use of its abundant factors of production?

Accepted Answer

Heckscher-Ohlin Theory

Answer

Mercantilism

Answer

Product Life Cycle Theory

Answer

Theory of Absolute Advantage