Deck 8: International Trade Theory and Practice

Question 1

Who propounded the opportunity cost Theory of international trade?

A)Ricardo
B)Marshall
C)Heckscher & Ohlin
D)Haberler

Answer 1

Haberler

Question 2

'Infant industry argument' in international trade is given in support of:

A)Granting Protection
B)Free trade
C)Curbing export
D)None of the above

Answer 2

Granting Protection

Question 3

The Heckscher-Ohlin approach to international trade provides important insights, in

A)Gains from trade
B)Effect of trade on production and consumption
C)Effect of trade on the incomes of production factors
D)All of the above

Answer 3

All of the above

Question 4

Which of the following is a determinant of trade?

A)Tastes
B)Per capita income
C)Technological change
D)All of the above

Question 5

Which of the following is not a benefit of international trade?

A)High wage levels for all domestic workers
B)Lower domestic prices
C)Development of more efficient methods and new products.
D)A greater range of consumption choices.

Question 6

What determines the pattern of specialisation and trade in industries with external economies of scale?

A)Product differentiation
B)Monopolistic competition
C)Historical competition
D)None of the above

Question 7

The exchange of goods and services are known as

A)International Trade
B)Trade
C)None of these
D)Domestic Trade

Question 8

Which is not an advantage of international trade:

A)Export of surplus production
B)Import of defence material
C)Dependence on foreign countries
D)Availability of cheap raw material

Question 9

The first classical theory of International Trade is given by

A)Friedman
B)Keynes
C)Adam Smith
D)Heckscher-Ohlin

Question 10

In classical theory of International Trade, the exchange of goods and services takes on the basis of ………….. system?

A)Barter
B)Money
C)Labour
D)Capital

Question 11

In Heckscher Ohlin theory, what is assumed to be same across the countries?

A)Capital
B)Labour
C)Transportation cost
D)Technology