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International Economics Practice Test
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International economics covers the effects upon economic activity from international differences in productive resources and consumer preferences and the international institutions that affect them.
International economics plays a crucial role in understanding and shaping the global economy. It helps explain the benefits and challenges of international trade, the effects of globalization on different economies, and the impact of economic policies on domestic and foreign markets.

International Economics Practice Test
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25 Questions

1. Which among the following are the major assumptions of Absolute advantage theory?
2. Which of the following exchange rate policies uses a target exchange rate, but allows the target to change?
3. Tariffs are
4. What records a country's transactions (made by individuals, firms and government bodies.) with the rest of the world?
5. The ability to produce more of a good or service than competitors, using the same amount of resources is
6. The _______________ records all international financial transactions that involve resident of the country concerned- changing either his assets with or his liabilities to a resident of another country.
7. What institution reduces the risk of bank runs in the U.S.?
8. Which among the following could be said to be an 'Open Economy'?
9. According to HO Model, India should import ______ abundant goods
10. International trade and domestic trade differ because of:
11. The supply of pounds to the currency market will be upward sloping if:
12. international trade refers to trade between
13. Protectionist trade policy is associated with
14. If the value of the pound in other currencies is strong, then other things being equal:
15. Product transformation curve is also called
16. Under a fixed exchange rate system, ____________________are official changes in the value of a country's currency relative to other currencies.
17. Unlike the balance of payments, the balance of international indebtedness indicates the international:
18. The Absolute advantage theory indicates that a country should engage in the production and exchange of those commodities where it has
19. ______________means the measures adopted for avoiding risks.
20. ____________states that at constant commodity prices, an increase in the quantity of one factor increases the production of the commodity intensive in this factor and reduces the output of the other commodity which is intensive in the constant factor.
21. U.S. military aid granted to foreign countries is entered in the:
22. In a floating exchange rate system:
23. If a respectable source speculates that there is a possibility of devaluation:
24. To prevent the external value of its currency rising the government could:
25. If the U.S. faces a balance-of-payments deficit on the current account, it must run a surplus on:

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