Question 1

The exchange of goods and services are known as

Accepted Answer

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

Question 2

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

Accepted Answer

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 D

Question 3

The first classical theory of International Trade is given by

Accepted Answer

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

Question 4

Which is not an advantage of international trade:

Accepted Answer

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

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

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

Question 7

Who propounded the opportunity cost Theory of international trade?

Accepted Answer

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

Question 8

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

Accepted Answer

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 9

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

Accepted Answer

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

Question 10

Which of the following is a determinant of trade?

Accepted Answer

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

Question 11

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

Accepted Answer

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

Exam 8: International Trade Theory and Practice