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the international economy and globalization MCQs

Practise focused the international economy and globalization questions with marked answers for exam preparation and subject revision.

the international economy and globalization Mcqs
1. The most wave of globalization which began in the 1980s has emphasized the outsourcing of ?
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A. natural resource extraction and mining jobs

B. services and white-collar jobs

C. manufacturing and blue-collar jobs

D. agriculture and farming jobs

2. Major trading partners of the United States including all of the following countries except ?
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A. Canada

B. Mexico

C. North Korea

D. China

3. For the United States automobiles are ?
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A. Imported, but not exported

B. Neither imported not exported

C. Exported, but not imported

D. Exported and imported
4. A tariff causes domestic firms to ________ and consumers to?
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A. underproduce, under consume

B. underproduce, overconsume

C. overproduce, under consume

D. Overproduce, overconsume

5. If there is a balance of payments deficit then in a floating exchange rate system ?
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A. Aggregate demand is increasing

B. The injections from trade are greater then the withdrawals

C. The external value of the currency would tend to rise

D. The external value of the currency would tend to fall
6. International trade is based on the idea that ?
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A. imports should exceed exports

B. Exports should exceed imports

C. Resources are more mobile internationally than are goods

D. Resources are less mobile internationally than are goods
7. Arguments for free trade are sometimes disregarded by politicians because ?
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A. Maximizing consumer welfare may not be a chief priority

B. Maximizing domestic efficiency is not considered imports

C. Economists tend to favor high protected domestic markets

D. There exist sound economic reasons for keeping ones economy isolated from other economies

8. Recent pressures for protectionism in the United States have been motivated by all of the following except ?
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A. High profit levels for American corporations

B. U.S firms shipping component production overseas

C. Sluggish rates of productivity growth in the United States

D. High unemployment rates among America workers

9. The theory that states that a country has a comparative advantage in the production of a product if that country is relatively well endowed with inputs used intensively in the production of that product is the?
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A. Heckscher Ohlin theorem

B. Friedman Samuelson theorem

C. Lucas-Laffer theorem

D. Ricardo Malthus theorem

10. The term tariff, as used in international trade refers to ?
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A. The price of goods when they leave the producing country

B. a government payment to encourage exports

C. a limit on the quantity of a good that can be imported into a country

D. a tax on imports
11. When countries from large trading blocs like the EU, the size of the bloc has the effect of improving them ?
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A. terms of trade

B. balance of trade

C. balance of payments

D. comparative advantage

12. The movement to free international trade is most likely to generate short-term unemployment in which industries ?
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A. Imports competing industries

B. Industries that sell to only foreign buyers

C. Industries that sell to domestic and foreign buyers

D. Industries in which there are neither imports nor exports

13. The largest amount of trade with the United States in recent years has been conducted by ?
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A. Mexico

B. Germany

C. Canada

D. United Kingdom

14. Free traders maintain that an open economy is advantageous is that it provides all of the following except ?
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A. A wider selection of products for consumers

B. Increased competition for world producers

C. Relatively high wages levels for all domestic workers

D. The utilization of the most efficient production methods

15. David Ricardos theory in favor of free trade uses the ideal of ?
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A. multilateral advantage

B. mutual advantage

C. absolute advantage

D. comparative advantage
16. International trade in goods and services is sometimes used as a substitute for all of the following except ?
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A. Domestic production of different goods and services

B. International movements of technology

C. International movements of capital

D. International movements of labor

17. If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?
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A. customs union

B. federation

C. common market

D. free trade area

18. A significant portion of actual world trade patterns results from ?
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A. the different tastes and preferences of people in different countries

B. different factor endowment between countries

C. different sizes of the countries

D. The industrial policies of governments

19. Government payments made to domestic firms in order to encourage exports are called ?
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A. Side payments

B. Tariffs

C. export quotas

D. subsidies
20. Technological improvements are similar to international trade since they both ?
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A. Reduce unemployment for all domestic workers

B. Ensure that industries can operate at less than full capacity

C. Provide benefits for all producers and consumers

D. Increase the nations aggregate income