Two countries can gain from foreign trade if ?

Related Mcqs:

1. When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

   A. trade diversion
   B. trade channeling
   C. trade creation and trade diversion
   D. trade creation

2. What is called that bank which regularly accepts foreign currency-denominated deposits and makes foreign currency-denominated deposits and makes foreign currency loans ?

   A. Eurobank
   B. Foreign bank
   C. International Bank
   D. Multinational Bank

3. Following World War II the United States and other countries sought to liberalize trade among each other the first major postwar step toward trade liberalization was the ?

   A. General Agreement on Tariffs and Trade
   B. World Trade Organization
   C. Smoot Hawley Organization
   D. McKinley Agreement on Trade policy

4. According to the trade theory of Staffan Linder trade tends to be most pronounced in manufactured goods when trading countries have ?

   A. similar endowments of natural resources
   B. similar levels of technology
   C. similar per-capita incomes
   D. similar wage levels

5. Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?

   A. relatively high; relatively large
   B. relatively high; relatively small
   C. relatively low ; relatively large
   D. relatively low ; relatively small

6. If a government uses barriers to foreign products such as biases against a foreign company’s bids or product standards that go against a foreign company’s product features the government is using ?

   A. Protectionism
   B. exchange controls
   C. exchange facilitators
   D. nontariff trade barriers

7. Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?

   A. flow from the United States to foreign countries
   B. flow from foreign countries to the United States
   C. remain totally in foreign countries
   D. remain totally in the United States

8. If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?

   A. common market
   B. free trade area
   C. customs union
   D. federation

9. A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?

   A. free trade area
   B. customs union
   C. common market
   D. monetary union

10. ________ is said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries in favor of member countries ?

    A. trade creation
    B. trade diversion
    C. trade exclusion
    D. trade distortion