MCQOPTIONS
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MCQOPTIONS
This section includes 200 Mcqs, each offering curated multiple-choice questions to sharpen your Economics (CBCS) knowledge and support exam preparation. Choose a topic below to get started.
| 151. |
Gains from trade depends on |
| A. | Relative strength of elasticity of demand for export and import good |
| B. | Size of the country |
| C. | Change in technology |
| D. | All of the above |
| Answer» E. | |
| 152. |
The two types of gains from trade are |
| A. | Internal and external gains |
| B. | Static and dynamic gains |
| C. | Relative and reactive gains |
| D. | All of the above |
| Answer» C. Relative and reactive gains | |
| 153. |
The income terms of trade is |
| A. | The net barter terms of trade of a country multiplied by its export volume index |
| B. | The ratio between the quantities of a country s imports and exports |
| C. | The ratio between the price of a country s export goods and import goods |
| D. | None of the above |
| Answer» B. The ratio between the quantities of a country s imports and exports | |
| 154. |
The opportunity cost theory considers |
| A. | Labour as the only factor of production |
| B. | Capital as the only factor of production |
| C. | Both labour and capital |
| D. | Land, labour and capital |
| Answer» D. Land, labour and capital | |
| 155. |
Since 1950, India s foreign trade has undergone important changes signifying that it has entered into |
| A. | Unilateral trade |
| B. | Bilateral trade |
| C. | Multilateral trade |
| D. | None of the above |
| Answer» D. None of the above | |
| 156. |
Which factor does not influence terms of trade? |
| A. | Devaluation |
| B. | Overpopulation |
| C. | Trade policy |
| D. | Immigration |
| Answer» E. | |
| 157. |
The concept of gross barter terms of trade was introduced by |
| A. | Jacob Viner |
| B. | Adam Smith |
| C. | Lionel Robbins |
| D. | F.W. Taussig |
| Answer» E. | |
| 158. |
The classical theory of international trade is based on |
| A. | Labour theory of value |
| B. | Less than full employment |
| C. | Exchange rate differences |
| D. | None of the above |
| Answer» B. Less than full employment | |
| 159. |
The principle of reciprocal demand was introduced by |
| A. | J.S.Mill |
| B. | Lionel Robbins |
| C. | Alfred Marshall |
| D. | Adam Smith |
| Answer» B. Lionel Robbins | |
| 160. |
The Comparative theory of international trade is based on |
| A. | Constant costs |
| B. | Variable costs |
| C. | Increasing costs |
| D. | Decreasing costs |
| Answer» B. Variable costs | |
| 161. |
In modern trade theory, the gains from specialization is also known as the |
| A. | Constant gains |
| B. | Consumption gains |
| C. | Production gains |
| D. | Internal gains |
| Answer» D. Internal gains | |
| 162. |
The necessity of absolute differences in costs of international trade is associated with |
| A. | Comparative advantage theory |
| B. | Opportunity Cost theory |
| C. | Absolute advantage theory |
| D. | Theory of Reciprocal Demand |
| Answer» D. Theory of Reciprocal Demand | |
| 163. |
If a country has favourable terms of trade, it will claim |
| A. | A larger share in the distribution of gains |
| B. | An equal share in the distribution of gains |
| C. | A smaller share in the distribution of gains |
| D. | None of the above |
| Answer» B. An equal share in the distribution of gains | |
| 164. |
A tariff or custom quota may either be |
| A. | Increasing or decreasing |
| B. | Fixed or variable |
| C. | Unilateral or bilateral |
| D. | Autonomous or agreed |
| Answer» E. | |
| 165. |
Under the effects of a tariff under partial equilibrium analysis, the revenue effect is the change in government receipts due to |
| A. | Producer s surplus |
| B. | Consumer s satisfaction |
| C. | Imposition of tariff |
| D. | Loss of consumer s surplus |
| Answer» D. Loss of consumer s surplus | |
| 166. |
An increase in the index of income terms of trade implies that |
| A. | A country cannot import more goods in exchange for its exports |
| B. | A country can import more goods in exchange for its exports |
| C. | A country cannot export more goods in exchange for its imports |
| D. | None of the above |
| Answer» C. A country cannot export more goods in exchange for its imports | |
| 167. |
The effects of quota under partial equilibrium include |
| A. | Redistributive effect |
| B. | Consumption effect |
| C. | Price effect |
| D. | All of the above |
| Answer» E. | |
| 168. |
A quota which established thorough mutual agreements or negotiation between countries is |
| A. | Allocated quota |
| B. | Unilateral quota |
| C. | Import-export quota |
| D. | Bilateral quota |
| Answer» E. | |
| 169. |
In the modern trade theory, the gains from international trade are clearly differentiated between |
| A. | The gains from exchange and the gains from specialization |
| B. | The gains from exchange and income |
| C. | The gains from exchange and price |
| D. | All of the above |
| Answer» B. The gains from exchange and income | |
| 170. |
Terms of trade expresses the relationship between |
| A. | Balance of payments between two countries |
| B. | The export price and import price of a country |
| C. | Gains and loss of a country in international trade |
| D. | None of the above |
| Answer» C. Gains and loss of a country in international trade | |
| 171. |
India figures among the top .global exporters and importers of services. |
| A. | Five |
| B. | Seven |
| C. | Ten |
| D. | Twenty |
| Answer» D. Twenty | |
| 172. |
The main reason for different nations to enter into trade is that |
| A. | Every nation can produce by itself all the commodities and services required by its citizens/people |
| B. | Some nations are capable to produce all the goods and services required by its people |
| C. | No country has the capacity to produce all the goods and services required by its citizens/people |
| D. | None of the above |
| Answer» D. None of the above | |
| 173. |
Which of the following is not the effect of tariff? |
| A. | Balance of payments effect |
| B. | Terms of trade effect |
| C. | competive effect |
| D. | none of the above |
| Answer» E. | |
| 174. |
J.S.Mill introduced the theory of reciprocal demand to explain |
| A. | Determination of factor endowments |
| B. | Determination of equilibrium terms of trade |
| C. | Determination of availability of resources |
| D. | Determination of equilibrium in balance of payments |
| Answer» C. Determination of availability of resources | |
| 175. |
Mill s theory of reciprocal demand indicates a |
| A. | Country s demand for one commodity in terms of the quantities of the other country it is prepared to give up in exchange |
| B. | Country s supply of a commodity in terms of the quantities of the other country it is prepared to give up in exchange |
| C. | Country s balance of payments |
| D. | Country s labour cost |
| Answer» B. Country s supply of a commodity in terms of the quantities of the other country it is prepared to give up in exchange | |
| 176. |
Mill s theory of reciprocal demand is based on one of the assumptions that |
| A. | There is less than full employment |
| B. | There is imperfect competition |
| C. | The commodities are produced under the law of constant returns |
| D. | There are transport costs involved |
| Answer» D. There are transport costs involved | |
| 177. |
The slope of the production possibility curve under Opportunity costs theory is also called |
| A. | The average production curve |
| B. | Marginal rate of transformation |
| C. | Indifference curve |
| D. | Isoquant curve |
| Answer» C. Indifference curve | |
| 178. |
When the export prices of a country relatively rises to its import prices, its terms of trade are said to have |
| A. | Deteriorated |
| B. | Improved |
| C. | Remain constant |
| D. | None of the above |
| Answer» C. Remain constant | |
| 179. |
When a country s import price relatively rises to its export prices, |
| A. | The terms of trade of a country remains the same |
| B. | The terms of trade of a country becomes worsened |
| C. | The terms of trade of a country improves |
| D. | None of the above |
| Answer» C. The terms of trade of a country improves | |
| 180. |
The positive effect of a tariff is, when there is an increase in the welfare of a country due to |
| A. | An improvement in the terms of trade |
| B. | An increase in its volume of trade |
| C. | A reduction in its volume of trade |
| D. | A decrease in its volume of trade |
| Answer» B. An increase in its volume of trade | |
| 181. |
The tariff that maximizes a country s welfare is called the |
| A. | Double column tariff |
| B. | Maximum and minimum tariff |
| C. | Optimum tariff |
| D. | None of the above |
| Answer» D. None of the above | |
| 182. |
Import quotas may be fixed either in terms of quantity or |
| A. | The supply of the product |
| B. | The value of the product |
| C. | Consumption of the product |
| D. | Demand of the product |
| Answer» C. Consumption of the product | |
| 183. |
Under the unilateral quota system, the autonomously fixed quota may either be |
| A. | Fixed or variable |
| B. | Positive or negative |
| C. | Global or allocated |
| D. | All of the above |
| Answer» D. All of the above | |
| 184. |
The factor price ratio(PC/PL)A < (PC/PL)B of countries A & B implies |
| A. | Country A is abundant in labour |
| B. | Country B is abundant in capital |
| C. | Country B is abundant in labour |
| D. | Country A is abundant in capital |
| Answer» E. | |
| 185. |
The term terms of trade between two countries refers to |
| A. | The barter terms of trade |
| B. | The quantity of exports |
| C. | Both (a) and (b |
| D. | The price |
| Answer» B. The quantity of exports | |
| 186. |
The fundamental reason why different countries involve in transactions with one another is the |
| A. | Theory of absolute differences in costs |
| B. | Production of goods |
| C. | Gains from trade |
| D. | Supply of goods |
| Answer» C. Gains from trade | |
| 187. |
The ratio between the quantities of a country s imports to its exports is known as |
| A. | Commodity or net barter terms of trade |
| B. | Single factoral terms of trade |
| C. | Gross barter terms of trade |
| D. | Double factoral terms trade |
| Answer» D. Double factoral terms trade | |
| 188. |
The top two countries that remain the top sources of FDI to India during 2017-19 are |
| A. | Singapore and Mauritius |
| B. | USA and Brazil |
| C. | France and Britain |
| D. | Bangladesh and Nepal |
| Answer» B. USA and Brazil | |
| 189. |
When government levies import duties which varies with prices of commodities imported , it is called |
| A. | Ad valorem duty |
| B. | Specific duty |
| C. | Compound duty |
| D. | Sliding scale duty |
| Answer» E. | |
| 190. |
A quota system which allows a certain specified quantity of a commodity to be imported duty free or at a low rate of import duty is |
| A. | Bilateral quota |
| B. | Global quota |
| C. | Tariff or custom quota |
| D. | Unilateral quota |
| Answer» D. Unilateral quota | |
| 191. |
In case of Mill s theory, where country A produces good X and country B produces good Y, if country A s demand for product Y increases, then country A s offer curve will |
| A. | Shift to the left |
| B. | Shift to the right |
| C. | Shift backwards |
| D. | Remain constant |
| Answer» C. Shift backwards | |
| 192. |
The quota system in which domestic producers of a quota fixing country are required to make use of both domestic raw materials and a specified proportion of imported raw materials to produce a product |
| A. | Bilateral quota |
| B. | Tariff or custom quota |
| C. | Import quota |
| D. | Mixing quota |
| Answer» E. | |
| 193. |
A tariff or import duty which are a combination of the ad valorem and specific duty |
| A. | Transit duty |
| B. | Sliding scale duty |
| C. | Revenue tariff |
| D. | Compound duty |
| Answer» E. | |
| 194. |
In balance of payments account, all goods exported and imported are recorded in |
| A. | Capital accounts |
| B. | Merchandise account |
| C. | Current account |
| D. | Savings account |
| Answer» D. Savings account | |
| 195. |
A tax or duty levied on goods when it enters or leave the national boundary of a country is called |
| A. | Tariff |
| B. | Quotas |
| C. | External economics |
| D. | Balance of payment |
| Answer» B. Quotas | |
| 196. |
The difference in the domestic cost ratios of producing two commodities in two countries is known as |
| A. | Actual gains |
| B. | Partial gains |
| C. | Potential gains |
| D. | Price gains |
| Answer» D. Price gains | |
| 197. |
The physical limitation of quantities of different products to be imported from foreign countries within a specified period of time is called |
| A. | Revenue tariff |
| B. | Gains from trade |
| C. | Import quota |
| D. | Optimum tariff |
| Answer» D. Optimum tariff | |
| 198. |
The difference in price ratios of two commodities in the two trading countries is |
| A. | Potential gains |
| B. | Partial gains |
| C. | Actual gains |
| D. | None of the above |
| Answer» D. None of the above | |
| 199. |
When a uniform rate of duty is imposed on all similar commodities irrespective of the country from which they are imported, it is called |
| A. | Single-column tariff |
| B. | Protective tariff |
| C. | Conventional tariff |
| D. | Double-column tariff |
| Answer» B. Protective tariff | |
| 200. |
Exchange rate depreciation reduces |
| A. | The value of home currency in relation to foreign currency |
| B. | The value of foreign currency in relation to a home currency |
| C. | Both the values of home currency and foreign currency |
| D. | None of the above |
| Answer» B. The value of foreign currency in relation to a home currency | |