Question Bank ''International Economics: Trade'' with interactive revision questions on a variety of economics topics.

Question Bank - Economics

International Economics: Trade

Q1. Economists suggest that trade's main advantage is allowing the world to achieve (Select one answer) (a) economic growth for all countries (b) greater equality between countries (c) more self-sufficiency (d) specialisation and the resulting economies of scale

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Q2. If the country of Zebina has a comparative advantage in the production of wheat over the country of Blund, then (Select one answer) (a) in Zebina, the opportunity cost of producing wheat is higher than in Blund (b) in Zebina, the opportunity cost of producing wheat is lower than it is in Blund (c) neither Blund nor Zebina should specialize only in the production of wheat (d) Zebina will export all of its wheat

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Q3. Terms of trade for a country are the ratio of ________________ to ________________ (Select one answer) (a) its currency, other currencies (b) export prices, import prices (c) its opportunity costs, world opportunity costs (d) value of exports, value of imports

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Q4. The original aims of the European Community were to (Select one answer) (a) achieve monetary union (b) form a political and economic union (c) set up a free trade area (d) none of the above

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Q5. The theory of international exchange that holds that exchange rates are set so that the price of similar goods in different countries is the same is the (Select one answer) (a) price feedback theory. (b) purchasing-power-parity theory. (c) trade feedback theory. (d) J-curve theory.

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