Challenges of International Trade: Quiz and Study Guide

Question 1

Which type of tariff is applied to imported goods as a percentage of their value?

Accepted Answer

Ad valorem

Answer

Specific

Answer

Mixed

Answer

Preferential

Question 2

True or False: Quotas impose limits on the number or quantity of goods that can be imported or exported within a specific period.

Accepted Answer

True

Answer

False

Question 3

Which of the following is NOT a factor that can influence exchange rate fluctuations?

Accepted Answer

Government spending

Answer

Interest rates

Answer

Inflation

Answer

Economic stability

Question 4

Tariffs can protect domestic industries by:

Accepted Answer

Raising the price of imported goods

Answer

Lowering the price of domestic goods

Answer

Increasing the demand for imported goods

Answer

Decreasing the supply of domestic goods

Question 5

True or False: Quotas can lead to surpluses of imported goods.

Accepted Answer

False

Answer

True

Question 6

What is NOT a primary goal of international trade agreements?

Accepted Answer

Shielding domestic industries

Answer

Lowering trade barriers

Answer

Boosting economic growth

Answer

Expanding market access

Question 7

Which of the following trade barriers directly limits the quantity of imported or exported goods?

Accepted Answer

Quotas

Answer

Tariffs

Answer

Exchange rate fluctuations

Answer

Embargoes

Question 8

How do tariffs primarily affect international trade?

Accepted Answer

Increase the cost of imported goods

Answer

Decrease the demand for domestic goods

Answer

Reduce government revenue

Answer

Increase domestic production

Question 9

Which government-mandated charge is levied on imported goods?

Accepted Answer

Tariff

Answer

Quota

Answer

Embargo

Answer

Sanction

Question 10

A quota system involves governmental limits on the quantity of a particular good that can be imported or exported. True or False?

Accepted Answer

True

Answer

False

Question 11

Which factor does NOT influence exchange rate fluctuations?

Accepted Answer

Lunar phases

Answer

Interest rates

Answer

Inflation

Answer

Government interventions

Question 12

Tariffs can safeguard domestic industries against foreign competition.

Accepted Answer

True

Answer

False

Question 13

Which potential consequence of exchange rate fluctuations affects businesses?

Accepted Answer

All of the listed options

Answer

Escalated costs

Answer

Reduced earnings

Answer

Intensified rivalry

Question 14

What is the primary objective of a trade embargo?

Accepted Answer

To restrict or prohibit trade with a specific country

Answer

To boost free trade

Answer

To reduce tariffs

Answer

To increase quotas

Question 15

Which is a potential advantage of engaging in international trade?

Accepted Answer

All of the listed options

Answer

Access to a broader range of goods and services

Answer

Increased economic growth

Answer

Job creation

Question 16

Which strategy is commonly employed by businesses to minimize the risks associated with exchange rate fluctuations?

Accepted Answer

All of the listed options

Answer

Forward contracts

Answer

Currency options

Answer

Hedging

Question 17

Which of the following is NOT classified as a non-tariff barrier to trade?

Accepted Answer

Quotas

Answer

Technical regulations

Answer

Standards

Answer

Import licenses

Question 18

International trade can contribute to the economic growth of developing nations. True or False?

Accepted Answer

True

Answer

False

Question 19

Which type of tariff is a percentage of the value of imported goods?

Accepted Answer

Ad valorem duty

Answer

Specific duty

Answer

Compound duty

Answer

Preferential duty

Question 20

How do quotas restrict international trade?

Accepted Answer

By limiting the quantity of goods allowed to be imported or exported

Answer

By increasing the price of imported goods

Answer

By imposing taxes on imported goods

Answer

By reducing the demand for imported goods

Question 21

Which of the following is a non-tariff barrier to trade?

Accepted Answer

Embargoes

Answer

Tariffs

Answer

Quotas

Answer

Exchange rate fluctuations

Question 22

A tariff is a tax levied on which of the following?

Accepted Answer

Imported goods

Answer

Exported goods

Answer

Domestically produced goods

Answer

Services

Question 23

What is the primary objective of the World Trade Organization (WTO)?

Accepted Answer

To promote free trade and reduce trade barriers

Answer

To regulate international trade in specific sectors

Answer

To resolve trade disputes between member countries

Answer

To provide financial assistance to developing countries

Question 24

Which of the following is a tax levied on imported goods?

Accepted Answer

Ad valorem tariff

Answer

Import quota

Answer

Embargo

Answer

Currency devaluation

Question 25

What is the primary role of the World Trade Organization in international trade?

Accepted Answer

Facilitating negotiations, enforcing trade rules, and resolving disputes

Answer

Setting global tariffs and quotas

Answer

Providing financial assistance to developing countries

Answer

Eliminating all trade barriers worldwide

Question 26

Which of the following is considered a non-tariff barrier to international trade?

Accepted Answer

Technical regulations

Answer

Import quotas

Answer

Export subsidies

Answer

Preferential trade agreements

Question 27

How do tariffs primarily affect businesses involved in international trade?

Accepted Answer

Increased production costs

Answer

Reduced demand for exported goods

Answer

Enhanced market competitiveness

Answer

Improved access to raw materials

Question 28

What is the primary purpose of imposing quotas in international trade?

Accepted Answer

Protect domestic industries from foreign competition

Answer

Generate revenue for the government

Answer

Stabilize exchange rates

Answer

Promote economic growth

Question 29

Which of the following is NOT a potential challenge associated with international trade?

Accepted Answer

Technological advancements

Answer

Cultural differences

Answer

Currency exchange risks

Answer

Language barriers

Question 30

Which government-imposed restriction limits the quantity of goods that can be imported or exported?

Accepted Answer

Quota

Answer

Tariff

Answer

Embargo

Answer

License

Question 31

Which option is NOT a potential advantage of international trade?

Accepted Answer

Higher consumer prices

Answer

Increased competition

Answer

Access to new markets

Answer

Economic growth

Question 32

A tariff is a tax primarily levied on:

Accepted Answer

Imported goods

Answer

Domestically produced goods

Answer

Exported goods

Answer

Goods in transit

Question 33

The process of tailoring products and marketing strategies to specific international markets is referred to as:

Accepted Answer

Localization

Answer

Globalization

Answer

Adaptation

Answer

Standardization

Question 34

Tariffs are a form of:

Accepted Answer

Import duty

Answer

Quota

Answer

Export subsidy

Answer

Exchange rate control

Question 35

Quotas restrict the:

Accepted Answer

Quantity of goods traded

Answer

Flow of investment

Answer

Movement of people

Answer

Value of goods traded

Question 36

Exchange rate fluctuations can lead to:

Accepted Answer

Reduced exports and increased imports

Answer

Increased tourism

Answer

Stable economic growth

Answer

Improved terms of trade

Question 37

What is the main objective of the World Trade Organization (WTO)?

Accepted Answer

To promote free and fair trade

Answer

To provide humanitarian aid

Answer

To negotiate peace agreements

Answer

To regulate international banking

Question 38

Which of the following is a potential negative consequence of international trade?

Accepted Answer

Job losses in certain industries

Answer

Improved living standards

Answer

Reduced poverty

Answer

Increased economic growth

Question 39

Which of the following indicates a country's comparative advantage in producing a particular good?

Accepted Answer

Producing the good at a lower relative cost than other countries

Answer

Having a higher production volume than other countries

Answer

Using more advanced technology than other countries

Question 40

Which of the following is a common challenge faced by businesses engaged in international trade?

Accepted Answer

Tariffs

Answer

Increased consumer choice

Answer

Favorable exchange rates

Answer

Technological advancements

Question 41

A tariff is best defined as:

Accepted Answer

A tax on imported goods

Answer

A subsidy for exported goods

Answer

A ban on foreign investment

Answer

A quota on imported services

Question 42

Which of the following is an example of a quota?

Accepted Answer

Limiting the number of imported cars

Answer

Allowing free trade between two countries

Answer

Imposing a tax on imported electronics

Answer

Providing financial assistance to domestic industries

Question 43

One of the key benefits of international trade is:

Accepted Answer

Access to a wider variety of goods and services

Answer

Elimination of all trade barriers

Answer

Protection from foreign competition

Answer

Guaranteed high profits for businesses

Question 44

A country with a higher value of exports compared to imports is said to have a:

Accepted Answer

Trade surplus

Answer

Balanced trade

Answer

Trade deficit

Answer

Negative trade

Question 45

Governments may use which of the following measures to shield domestic industries from international competition?

Accepted Answer

Tariffs or quotas

Answer

Free trade agreements

Answer

Subsidies

Question 46

Which of the following factors can potentially hinder the growth of international trade?

Accepted Answer

Political instability

Answer

Economic growth

Answer

Increased consumer spending

Answer

Technological advancements

Question 47

Globalization has led to:

Accepted Answer

Increased interconnectedness among nations

Answer

Reduced foreign direct investment

Answer

Stagnant cross-border trade

Answer

Complete elimination of cultural differences

Question 48

Identify the key benefit of international trade for consumers.

Accepted Answer

Increased variety and choice of goods and services

Answer

Increased unemployment rates

Answer

Environmental pollution

Answer

Depletion of natural resources

Question 49

What term defines the relative value of one currency compared to another?

Accepted Answer

Exchange rate

Answer

Interest rate

Answer

Balance of payments

Answer

Inflation rate

Question 50

Which of the following is a negative consequence of exchange rate fluctuations?

Accepted Answer

Unpredictability and uncertainty for businesses engaged in international trade

Answer

Increased consumer spending and economic growth

Answer

Increased exports and reduced imports

Answer

Lower prices for imported goods

Question 51

What is the primary function of the World Trade Organization (WTO)?

Accepted Answer

Facilitating free trade, resolving trade disputes, and establishing global trade rules

Answer

Regulating foreign direct investment flows

Answer

Imposing tariffs on imported goods

Answer

Providing financial assistance to developing countries

Question 52

Differentiate between a quota and a tariff.

Accepted Answer

A quota sets limits on the quantity of goods that can be imported or exported, while a tariff adds a tax to imported goods.

Answer

Quotas are invariably more effective than tariffs.

Question 53

Which challenge do developing countries commonly face in international trade?

Accepted Answer

Limited access to advanced technologies and infrastructure

Answer

Favorable exchange rates

Answer

Abundant foreign direct investment

Answer

High domestic demand for goods and services