- International Marketing mcq Set 1
- International Marketing mcq Set 2
- International Marketing mcq Set 3
- International Marketing mcq Set 4
- International Marketing mcq Set 5
- International Marketing mcq Set 6
- International Marketing mcq Set 7
MCQ of International Marketing
QN1: The factor endowment model of international trade was developed by
a. Adam Smith
b. David Ricardo
c. John Stuart Mill
d. Eli Heckscher and Bertil Ohlin
Answer
d. Eli Heckscher and Bertil Ohlin
QN2: Dynamic comparative advantage theory
a. helps explain why some nations use industrial policy to support potentially competitive new firms
b. cannot explain strategic competition between firms such as Boeing and Airbus
c. is another name for Ricardo s comparative advantage theory
d. None of the above
Answer
a. helps explain why some nations use industrial policy to support potentially competitive new firms
QN3: Intra-industry trade theory
a. explains why the United States might export autos and import clothing
b. “explains why the United States might export and import differentiated versions of the same product, such as different types of autos”
c. assumes that transport costs are very low or do not exist
d. ignores seasonal considerations for agricultural goods
Answer
b. “explains why the United States might export and import differentiated versions of the same product, such as different types of autos”
QN4: “Should international transportation costs decrease, the effect on international trade would include a (an):”
a. Increase in the volume of trade
b. Smaller gain from trade
c. Decline in the income of home producers.
d. Decrease in the level of specialization in production
Answer
a. Increase in the volume of trade
QN5: “If tastes are identical between countries, then comparative advantage is determined by:”
a. supply conditions only
b. demand conditions only
c. supply and demand conditions.
d. can t tell without more information.
Answer
a. supply conditions only
QN6: The trade model of the Swedish economists Heckscher and Ohlin maintains that:
a. Absolute advantage determines the distribution of the gains from trade.
b. Comparative advantage determines the distribution of the gains from trade.
c. The division of labor is limited by the size of the world market
d. A country exports goods for which its resource endowments are most suited
Answer
d. A country exports goods for which its resource endowments are most suited
QN7: The product cycle theory of trade is essentially a
a. “static, short run trade theory”
b. “dynamic, long run trade theory”
c. zero-sum theory of trade
d. negative-sum theory of trade
QN8: The comparative advantage model of Ricardo was based on
a. intraindustry specialization and trade
b. interindustry specialization and trade
c. demand conditions underlying specialization and trade
d. income conditions underlying specialization and trade
QN9: “According to the factor endowment model of Heckscher and Ohlin, countries heavily endowed with land will”
a. Devote excessive amounts of resources to agricultural production
b. Devote insufficient amounts of resources to agricultural production
c. Export products that are land-intensive
d. Import products that are land-intensive
Answer
c. Export products that are land-intensive
QN10: Wassily Leontief’s results can be interpreted as
a. evidence against the Ricardian model
b. evidence against the Heckscher-Ohlin model
c. support for the Ricardian model
d. support for the Heckscher-Ohlin model
Answer
b. evidence against the Heckscher-Ohlin model
QN11: A tariff can _ raise a country’s welfare
a. never
b. sometimes
c. always
d. none of the above
Answer
b. sometimes
QN12: The Heckscher-Ohlin assumes that _ are identical between countries
a. tastes and preferences
b. technology levels
c. factor endowments
d. both (a) and (b)
Answer
d. both (a) and (b)
QN13: “If a country an imposes an import tariff, its welfare can improve if”
a. “the country is a “”small country”” rather than a “”large country?”
b. its terms of trade improve enough
c. the tariff enhances the welfare of its trading partners
d. its government’s tax revenue increases because of the tariff
Answer
b. its terms of trade improve enough
QN14: Wassily Leontief used an input-output table in order to test the
a. Ricardian theory of comparative advantage
b. Heckscher Ohlin theory of comparative advantage
c. Linder theory of overlapping demand
d. all of the above
Answer
b. Heckscher Ohlin theory of comparative advantage
QN15: “In his empirical test of comparative advantage, Wassily Leontief found that”
a. U.S. exports are capital intensive relative to U.S. imports
b. U.S. imports are labor intensive relative to U.S. exports
c. U.S. exports are neither labor nor capital intensive
d. none of the above
Answer
d. none of the above
QN16: According to the Heckscher-Ohlin model
a. everyone automatically gains from trade
b. the gainers from trade outnumber the losers from trade
c. the scarce factor necessarily gains from trade
d. none of the above
Answer
b. the gainers from trade outnumber the losers from trade
QN17: A tariff that prohibits imports has only
a. a revenue effect and redistribution effect
b. revenue effect and protection effect
c. consumption effect and protection effect
d. redistribution effect and consumption effect
Answer
c. consumption effect and protection effect
QN18: “In developed countries, tariffs on raw materials tend to be”
a. highest of all
b. higher than on manufactured goods
c. equal to tariffs on manufactured goods
d. lower than on manufactured goods
Answer
d. lower than on manufactured goods
QN19: One of the predictions of the Heckscher-Ohlin model is that:
a. countries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other.
b. “countries will tend to specialize, but not completely, in their comparative advantage good”
c. reciprocal demand leads to an equilibrium terms of trade by inducing changes in both demand and supply
d. all of the above
Answer
d. all of the above
QN20: Which of the following best describes the primary function of the International Monetary Fund?
A) It acts as the Secretary of Treasury.
B) It provides relief to needy counties in the United States.
C) It provides assistance to needy contries.
D) It assists in banking affairs to keep foreign currency exchange balanced.
Answer
Answer: C) It provides assistance to needy contries.
QN21: The EU treaty creates open borders for trade by providing for the free flow of all of the following EXCEPT
A) capital.
B) goods.
C) services
D) custom duties.
Answer
Answer: D) custom duties.
QN22: A dispute among members of the WTO is first heard by
A) the director of foreign affairs.
B) the WTO’s appellate body.
C) a three-member panel of the WTO.
D) leaders from their respective countries.
Answer
Answer: C) a three-member panel of the WTO.
QN23: The Maastricht Treaty included provisions in which of the following areas?
A) justice and home affairs
B) monetary union
C) military integration
D) political integration
E) All these answers are correct.
Answer
Answer: E) All these answers are correct.
QN24: The African Union is an example of___integration.
A) regional
B) relative
C) global
D) bilateral
Answer
Answer: A) regional
QN25: Regional trade groups in Africa___.
A) are more concerned about political than economic issues
B) often overlap in terms of membership
C) have not been implemented due to trade barriers
D) have resulted in countries relying more on each other than on former colonial powers for trading relationships
Answer
Answer: D) have resulted in countries relying more on each other than on former colonial powers for trading relationships
QN26: The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)_.
A) allows rich countries to produce generic versions of patented drugs without having to pay royalties to the patent holder
B) permits developing countries to import generic products from other countries if they don’t have the capacity to produce generic drugs
C) requires tiered pricing for most drugs
D) deals with vaccines, such as for malaria, but does not cover drugs such as those used to treat HIV/AIDS
Answer
Answer: B) permits developing countries to import generic products from other countries if they don’t have the capacity to produce generic drugs
QN27: The NAFTA side agreements include___.
A) labor standards only
B) internal tariff laws
C) environmental standards only
D) environmental and labor standards
Answer
Answer: D) environmental and labor standards
QN28: Labor and environmental standards were included in the NAFTA agreement
A) to protect U.S. consumers from receiving environmentally damaging products from abroad
B) because of rules required by the WTO
C) to help opponents of NAFTA concerned about labor and environmental problems in Mexico
D) in order to convince the Mexican Congress that U.S. investors would not damage Mexico.
Answer
Answer: B) because of rules required by the WTO
QN29: Rules of origin ensure that___.
A) only goods that were produced mostly within the member country are eligible for the more liberal tariff conditions created by FTA
B) only African products may be shipped to member countries
C) the members of FTA may import products from only neighboring members
D) all members have the same external tariffs
Answer
Answer: A) only goods that were produced mostly within the member country are eligible for the more liberal tariff conditions created by FTA
QN30: The euro, the currency of the European Union,_.
A) was adopted by all 15 existing members when it was first initiated
B) must be adopted by countries as a precondition to joining the European Union
C) is open to countries that are not members of the EU as long as they use the European Central Bank to set interest rates
D) was designed to help eliminate currency as a barrier to trade in the EU
Answer
Answer: D) was designed to help eliminate currency as a barrier to trade in the EU
QN31: Which of the original 15 members of the European Union did not adopt the euro when it was first implemented?
A) the U.K.
B) France
C) Germany
D) Malta
Answer
Answer: A) the U.K.
QN32: Assume that U.S. companies are importing the same product from Mexico and Taiwan. The United States enters into an FTA with Mexico but not with Taiwan. Consequently, the United States begins to import more goods from Mexico (due to lower tariffs) than from Taiwan, even though the Mexican products may not be any better or cheaper. This is an example of___.
A) trade specialization
B) trade internalization
C) trade creation
D) trade diversion
Answer
Answer: D) trade diversion
QN33: The___set steps to accomplish monetary union in the European Union, which included the creation of the euro.
A) Single European Act
B) Treaty of Maastricht
C) European Monetary Union
D) European Central Bank
Answer
Answer: B) Treaty of Maastricht
QN34: The___is the common currency of the European Union.
A) franc
B) pound
C) euro
D) mark
Answer
Answer: C) euro
QN35: The three major responsibilities of the___are legislative power, control over the budget, and supervision of executive decisions.
A) European Commission
B) European Council
C) European Parliament
D) European Court of Justice
Answer
Answer: C) European Parliament
QN36: The EU organization that provides political leadership, drafts laws, and runs the daily programs of the EU is the___.
A) European Commission
B) Council of Ministers
C) European Parliament
D) European Central Bureaucracy
Answer
Answer: C) European Parliament
QN37: The EU organization that ensures consistent interpretation and application of EU treaties is the___.
A) European Commission
B) Council of Ministers
C) Court of Justice
D) Council of Treaties and Laws
Answer
Answer: A) European Commission
QN38: The___is the European Union’s ultimate decision-making body and is composed of the different ministers of the member countries.
A) European Commission
B) Council of the European Union
C) European Parliament
D) European Court of Justice
Answer
Answer: B) Council of the European Union
QN39: Trade shifting to countries in a group at the expense of trade with countries not in the group, even though the nonmember companies might be more efficient in the absence of trade barriers, is known as___.
A) trade specialization
B) trade diversion
C) trade creation
D) trade internalization
Answer
Answer: B) trade diversion
QN40: The goal of a___is to abolish all tariffs among member countries.
A) customs union
B) common market
C) free trade agreement
D) Common internal tariff
Answer
Answer: C) free trade agreement
