trade policies for the developing nations MCQs – Page 2

Practise focused trade policies for the developing nations questions with marked answers for exam preparation and subject revision.

trade policies for the developing nations Mcqs

21. Assume that global recession causes the quantity of tin demanded to decrease by 4 million pounds at each price To maintain the price of tin at the target price you would ?
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A. sell 8 million pounds of tin

B. sell 4 million pounds of tin

C. buy 8 million pounds of tin

D. buy 4 million pounds of tin

22. To be considered a good candidate for export cartel, a commodity should ?
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A. have a high price elasticity of demand

B. be a manufactured good

C. have a low price elasticity of supply

D. be a primary product

23. Export-led growth strategies tend to emphasize ?
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A. resource allocation based on the principle of comparative advantage

B. resource allocation based on the principle of absolute advantage

C. trade protection for import-competing firms

D. trade protection for exporting-competing firms

24. For the oil-importing countries, the increase in oil prices in 1970s and early 2000s contributed to all of the following except ?
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A. price inflation

B. improving terms of trade

C. balance of trade deficits

D. constrained economic growth

25. An export quota agreement to stabilize the price of bauxite tends to be more successful when the member producer countries as a percentage of the worlds producer countries is __________ and the _________ it is for the member producer countries to store/stock pile bauxite?
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A. relatively large; easier

B. relatively small; more difficult

C. relatively small; easier

D. relatively large; more difficult

26. Assume That the firms operate as purely competitive sellers (a purely competitive industry) In the long run, equilibrium price equals _________ quantity equals _________ and profits total _________?
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A. $100, 2 million barrels per day $60 million

B. $80, 4 million barrels per day $70 million

C. $40, 8 million barrels per day, $0 million

D. $60, 6 million barrels per day, $20 million

27. Suppose that the world price of tin is above the target (ceiling) price that is defined by an international commodity agreement. To move the world price toward the target price, a buffer stock agreement would require its buffer stock manager to ____ tin and an export quota agreement would require that member countries _________ their export of tin?
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A. purchase; decrease

B. purchase; increase

C. sell; decrease

D. sell; increase

28. The pattern of economic growth describes the phenomenon of countries moving up in technological development by following the patterns of countries ahead of them in the development process ?
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A. export orientation

B. commodity expansion

C. flying geese

D. import substitution

29. Suppose that the demand curve for tin is highly inelastic. If the supply curve of tin decrease and increase cyclically along the demand curve for tin then in this market the size of the price fluctuation will be __________ the size of the quantity fluctuations?
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A. the same as

B. relatively less than

C. any of the above

D. relatively greater then

30. Economic growth occurs because ?
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A. labor forces increase

B. capital stocks increase

C. All of the above

D. new inventions increase productivity

31. All of the following are trade problems of developing countries except?
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A. improving terms of trade

B. highly elastic demand curves for their products

C. unstable export markets

D. limited access to the markets of industrial countries

32. Suppose that the firms collude and become a cartel The best level of output for the cartel as a whole is ___________ the price equals __________ and profits total __________?
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A. 2 million barrels per day, $100, $60 million

B. 6 million barrels per day, $60, $60 million

C. 4 million barrels per day, $80, $160 million

D. 8 million barrels per day, $40, $20 million

33. Most of developing-country exports consist of ?
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A. labor-intensive agricultural products

B. primary products such as tin and bauxite

C. labor-intensive manufacturing products

D. intermediate products

34. Which of the following strategies have developing countries not used to deal with the problem of unstable export markets ?
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A. production and export controls

B. multilateral contracts

C. tariff-rates quotas

D. buffer stock arrangements

35. The OPEC oil cartel ?
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A. has shown that is easy to achieve cooperation among cartel members

B. was successful in raising oil prices in the 1970s but was disbanded in the 1980s

C. has shown greater success in realizing profits during periods of global recession

D. has had a level of success in raising oil prices that other developing countries are unlikely to achieve with other primary commodities

36. _________ policies attempt to foster industrialization by establishing high barriers to imports of foreign goods to promote local production ?
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A. absolute advantage

B. export-led growth

C. comparative advantage

D. import substitution

37. Import substitution is an example of ?
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A. the principle of absolute advantage

B. an outward-looking growth strategy

C. the principle of comparative advantage

D. an inward-looking growth strategy

38. Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as a guide to resource allocation ?
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A. export promotion

B. international commodity agreements

C. import promotion

D. multilateral contracts

39. The arrangement where goods imported from trading partners in the developing world are subject to lower tariff rates than goods from other countries is referred to as ?
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A. most favored nation status

B. Generalized System of Preferences

C. normal trade relation status

D. offshore assembly provisions

40. Suppose that the supply curve of tin is highly inelastic. If the demand curve of tin decrease and increase cyclically along the supply curve of tin, then in this market the size of the quantity fluctuation will bathe size of the price fluctuations ?
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A. the same as

B. relatively less than

C. Any of the above

D. relatively greater than

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