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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. If Canada runs a current account surplus and exchange rates are floating:
2. What is the main reason behind the introduction of the euro?
3. Which among the following sentence is NOT true
4. A common or single market will have all of the following features except:
5. In a floating exchange rate system:
6. Reducing a current account surplus requires a country to:
7. If interest rates on the euro are consistently below U.S. interest rates, then for the international Fisher effect (IFE) to hold:
8. Devaluation works best when
9. Current and capital accounts are examples of
10. Distinguish between autonomous and accommodating items in the balance of payments.
11. When capital mobility is perfect, interest rate differentials will tend to be offset by ________
12. The absolute slope of a concave PPC is given by
13. The quantity of dollars supplied to the foreign Exchange market would increase if, other things remaining equal:
14. Which of the following is an example of 'Eurocurrency' trade?
15. The welfare effects of a quota depend to a considerable extent upon
16. You have an opportunity to invest in Australia at an interest rate of 8%. Moreover, you expect the Australian dollar (A$) to appreciate by 2%. Your effective return from this investment is:
17. When the exchange rate is determined by the market forces of demand and supply, it is known as :
18. At negative nominal interest rates, which one of the following statements is the most accurate?
19. Theory of Absolute advantage is
20. A tariff:
21. ____________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.
22. Rich countries have deficit in their balance of payments:
23. Country A and Country B produce computers and Web sites. The unit labor requirements are given in the table below: Computers Web pages Country A 50 1 Country B 100 1 At which of the following relative prices (computers in terms of Web sites) will Country B produce both goods under free trade?
24. Which balance-of-payments item does not directly enter into the calculation of the U.S.gross domestic product?
25. What is the Metzler paradox?

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