Which of the following involves a trade – off ?

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. 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

3. How is termed equal rights of trade of trade without giving monopolies or preferences to an individual country ?

   A. Open door market
   B. Open door country
   C. Open sky market
   D. Free economy

4. Which round of international trade negotiations resulted in the creation of the World Trade Organization ?

   A. Kennedy Round of 1964-1967
   B. Tokyo Round of 1973-1979
   C. Uruguay Round of 1986-1993
   D. Doha Round of 2003-2007

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. With free trade, suppose that the rest of the world can supply calculators to Canada at a price of $30. Canada’s imports would now equal _____ and its consumer surplus would ____ relative to what occurred in the absence of trade. What is the change in consumer surplus? Refer to the figure that you have plotted ?

   A. 20 calculators increase
   B. 25 calculators decrease
   C. 25 calculators increase
   D. 30 calculators increase

7. Given free trade, small nations tend to benefit the most from trade since they ?

   A. Are more productive than their large trading partners
   B. Are less productive than their large trading partners
   C. Have demand preferences and income levels lower than their large trading partners
   D. Realize terms of trade lying near the MRTs of their large trading partners

8. Under free trade, Canada would not realize any gains from trade with Sweden if Canada ?

   A. Trades at Canada’s marginal rate of transformation
   B. Trade at Sweden’s marginal rate of transformation
   C. Specializes completely in the production of its export good
   D. Specializes partially in the production of its exports goods

9. Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?

   A. the absorption approaches
   B. the Marshall Lerner approach
   C. the monetary approach
   D. the elasticities approach

10. When did World Trade Organization replace General Agreement on Tariffs and Trade (GATT)?

    A. 1st January 1995
    B. 1st January 1998
    C. 1st December 1999
    D. 1st June 2000

    Submitted by: Syed Nizakat Ali Shah