Exam Questions - International Economic Relations PDF

**Introduction to International Economic Relations repetition** 1. **What is the primary focus of international economic relations?**\ a) Domestic trade policies\ **b) The interaction of countries through trade, investment, and finance**\ c) Internal government spending\ d) Agr...

**Introduction to International Economic Relations repetition** 1. **What is the primary focus of international economic relations?**\ a) Domestic trade policies\ **b) The interaction of countries through trade, investment, and finance**\ c) Internal government spending\ d) Agricultural development 2. **What is a defining characteristic of the world economy?**\ a) Complete economic independence of nations\ b) Uniform growth rates across countries\ **c) Interdependence of national economies**\ d) Elimination of trade barriers 3. **Which of the following is a major driver of global economic integration?**\ **a) Technological advancements**\ b) Decreased global population\ c) Increased national isolation\ d) Lack of regional agreements **The Conceptualisation and Structure of the World Economy** 4. **What is the world economy?**\ **a) The system of global interdependence and economic activity among countries**\ b) An isolated economic system\ c) A regional economic zone\ d) The economic policies of a single country 5. **Which sector is most prominent in driving globalization?**\ a) Agriculture\ b) Manufacturing\ **c) Services**\ d) Mining 6. **What is the main characteristic of a developed economy?**\ a) Low GDP per capita\ **b) High levels of industrialization and income**\ c) Large rural population\ d) Dependence on primary sectors **International Trade and Economic Growth** 7. **How does international trade contribute to economic growth?**\ a) By restricting market access\ b) By increasing government subsidies\ **c) By expanding markets for goods and services**\ d) By reducing global competition 8. **What is a comparative advantage?**\ a) Producing goods with the least input\ **b) Producing goods at a lower opportunity cost**\ c) Exporting goods without tariffs\ d) Maximizing trade barriers 9. **Which of the following is an example of trade fostering growth?**\ **a) A country exporting high-tech products to global markets**\ b) Countries imposing tariffs on imports\ c) Firms investing in domestic-only markets\ d) Reducing specialization in industries **International Flows of Services** 10. **What are international flows of services?**\ a) Physical trade of goods\ b) Cross-border capital movements\ **c) Exchange of intangible products like banking or tourism**\ d) Domestic government services 11. **Which industry is an example of services trade?**\ **a) Tourism**\ b) Agriculture\ c) Mining\ d) Manufacturing 12. **What is the significance of services in the global economy?**\ a) Services have minimal economic impact\ **b) Services are the fastest-growing segment of global trade**\ c) Services are confined to local economies\ d) Services reduce globalization **International Capital Flows** 13. **What are international capital flows?**\ a) Movement of goods between countries\ **b) Cross-border investments in stocks, bonds, and real estate**\ c) Domestic currency transactions\ d) International trade of services 14. **Which type of capital flow is foreign direct investment (FDI)?**\ a) Portfolio investment\ **b) Long-term investment in productive assets abroad**\ c) Remittances from migrant workers\ d) Trade credit 15. **Which factor most influences capital flows?**\ a) Cultural similarities\ b) Geographic proximity\ **c) Differences in interest rates and returns**\ d) Language barriers **Cross-Border Movement of Labour** 16. **What is the primary reason for cross-border movement of labor?**\ **a) Differences in wages and employment opportunities**\ b) Desire for cultural exchange\ c) Political alliances\ d) Environmental policies 17. **What is the term for professionals moving to another country for work?**\ a) Labor migration\ **b) Brain drain**\ c) Capital flight\ d) Trade migration 18. **Which sector most commonly attracts migrant labor?**\ **a) Construction and agriculture**\ b) Technology export services\ c) Domestic-only manufacturing\ d) High-value luxury goods **International Division of Labour** 19. **What is the international division of labor?**\ a) Equal distribution of work among nations\ b) All nations focusing on the same industries\ **c) Specialization of countries in specific economic activities**\ d) Redistribution of domestic tasks globally 20. **What is a common outcome of international specialization?**\ a) Self-sufficiency of economies\ **b) Increased efficiency and trade**\ c) Reduced global economic output\ d) Limited access to resources 21. **Which industry is most associated with international division of labor?**\ a) Retail services\ b) Public sector jobs\ **c) Manufacturing and technology production**\ d) Local real estate **International Flows of Knowledge and Technology** 22. **What is the main driver of international flows of knowledge?**\ a) Currency exchange\ **b) Global research and development collaborations**\ c) Tariff agreements\ d) Trade restrictions 23. **What role does technology transfer play in globalization?**\ a) Isolates local industries\ **b) Promotes industrial and economic development**\ c) Decreases innovation globally\ d) Reduces competitive advantages 24. **Which organization is most involved in promoting knowledge sharing?**\ a) WTO\ **b) UNESCO**\ c) OPEC\ d) IMF **Foreign Trade Policy and Its Instruments** 25. **What is an example of a foreign trade policy instrument?**\ a) Domestic banking regulations\ **b) Tariffs on imported goods**\ c) Local tax incentives\ d) Free public education 26. **What is the purpose of a quota in trade policy?**\ **a) To limit the volume of imports or exports**\ b) To reduce labor migration\ c) To increase tax collection\ d) To protect domestic intellectual property 27. **What is a common effect of export subsidies?**\ a) Reduces international competition\ **b) Makes domestic goods cheaper on global markets**\ c) Decreases exports\ d) Increases tariffs **Foreign Trade Policy and Its Instruments** 25. **What is an example of a foreign trade policy instrument?**\ a) Domestic banking regulations\ **b) Tariffs on imported goods**\ c) Local tax incentives\ d) Free public education 26. **What is the purpose of a quota in trade policy?**\ **a) To limit the volume of imports or exports**\ b) To reduce labor migration\ c) To increase tax collection\ d) To protect domestic intellectual property 27. **What is a common effect of export subsidies?**\ a) Reduces international competition\ **b) Makes domestic goods cheaper on global markets**\ c) Decreases exports\ d) Increases tariffs **Introduction to International Economic Relations** 1. **What does globalization in the context of international economic relations mean?**\ a) Increasing national self-sufficiency\ b) Reduced trade between countries\ **c) Greater integration of economies worldwide**\ d) Complete elimination of borders 2. **What is one key aspect of international economic relations?**\ **a) Trade, investment, and labor mobility**\ b) Centralized economic planning\ c) Internal resource distribution\ d) Domestic tax reform 3. **Which field is most closely associated with international economic relations?**\ a) Psychology\ **b) International trade and finance**\ c) Local governance\ d) Environmental conservation **The Conceptualisation and Structure of the World Economy** 4. **What is the foundation of the global economic structure?**\ a) Agricultural exports\ b) Domestic policies\ **c) Trade, capital, and labor flows**\ d) Regional isolation 5. **Which organization provides an overview of global economic trends?**\ **a) International Monetary Fund (IMF)**\ b) Red Cross\ c) United Nations Educational, Scientific and Cultural Organization (UNESCO)\ d) World Wildlife Fund (WWF) 6. **Which of the following is a key component of the global economy?**\ a) Local industries only\ **b) Multinational corporations (MNCs)**\ c) Non-governmental organizations (NGOs)\ d) Religious institutions **International Trade and Economic Growth** 7. **What is the primary goal of international trade?**\ a) Promoting self-sufficiency\ b) Reducing global competition\ **c) Increasing economic efficiency and access to resources**\ d) Limiting imports 8. **Which of the following is an indicator of trade\'s impact on growth?**\ a) Reduced foreign investment\ **b) Expansion of industries and employment opportunities**\ c) Increased trade barriers\ d) Decline in GDP 9. **How can trade imbalances affect economic growth?**\ **a) By leading to potential debt crises for deficit countries**\ b) By strengthening all economies equally\ c) By ensuring surplus countries invest domestically\ d) By stabilizing exchange rates **International Flows of Services** 10. **Which service industry is most impacted by international flows?**\ a) Manufacturing\ **b) Tourism**\ c) Agriculture\ d) Mining 11. **What is a key feature of the global services market?**\ **a) Intangible products like consulting or IT**\ b) Physical goods transportation\ c) Fixed pricing across borders\ d) Dominance by primary sectors 12. **What makes services trade distinct from goods trade?**\ a) Lack of government regulation\ **b) The inability to store or transport services**\ c) Exclusive focus on domestic markets\ d) Consistency across countries **International Capital Flows** 13. **What is an example of portfolio investment?**\ a) Purchasing factories abroad\ b) Migrant remittances\ **c) Buying shares in foreign companies**\ d) Trade in physical commodities 14. **Which type of capital flow often leads to long-term economic development?**\ a) Short-term loans\ b) Portfolio investment\ **c) Foreign direct investment (FDI)**\ d) Currency speculation 15. **What can excessive outflows of capital from a country lead to?**\ **a) Reduced domestic investment and currency depreciation**\ b) Increased foreign aid\ c) Strengthened economic resilience\ d) Higher interest rates abroad **Cross-Border Movement of Labour** 16. **Which factor attracts labor migration to a specific country?**\ **a) Higher wages and better living conditions**\ b) Reduced taxes on local businesses\ c) Availability of natural resources\ d) Strict immigration policies 17. **What is a significant challenge of labor migration for sending countries?**\ **a) Brain drain**\ b) Excessive labor supply\ c) Reduced remittances\ d) Limited foreign demand 18. **What is the primary impact of remittances on the sending country?**\ a) Creation of trade deficits\ **b) Contribution to economic stability and development**\ c) Reduction in GDP\ d) Increase in currency outflows **International Division of Labour** 19. **What is the basis of the international division of labor?**\ a) Uniform global resource distribution\ b) Equal production capacities\ **c) Specialization according to comparative advantage**\ d) Centralized production planning 20. **Which of the following industries exemplifies global specialization?**\ a) Retail trade\ **b) Automobile manufacturing**\ c) Domestic tourism\ d) Local agriculture 21. **What can excessive reliance on a single export sector lead to?**\ a) Economic diversification\ b) Enhanced trade partnerships\ **c) Vulnerability to global price fluctuations**\ d) Improved trade balances **International Flows of Knowledge and Technology** 22. **What is the significance of knowledge transfer in global trade?**\ a) Reduces innovation gaps globally\ b) Promotes intellectual property theft\ **c) Enhances technological progress in developing economies**\ d) Slows economic growth 23. **What is an example of technology transfer?**\ **a) Licensing foreign technology for local use**\ b) Importing raw materials\ c) Currency exchange programs\ d) Migrant remittances 24. **Which industry benefits most from international knowledge flows?**\ a) Traditional farming\ **b) Information and communication technology (ICT)**\ c) Retail\ d) Construction **Foreign Trade Policy and Its Instruments** 25. **What is a key goal of foreign trade policy?**\ a) Increasing trade barriers\ b) Reducing domestic economic growth\ **c) Encouraging exports and protecting domestic industries**\ d) Limiting international cooperation 26. **What is the role of anti-dumping duties?**\ a) Encourage cheaper imports\ **b) Protect domestic industries from unfairly low-priced foreign goods**\ c) Subsidize foreign competitors\ d) Eliminate quotas 27. **What is the function of export credits?**\ **a) To assist domestic exporters in financing international sales**\ b) To increase import restrictions\ c) To stabilize foreign currencies\ d) To fund domestic consumer purchases **Theories of International Trade** 28. **Who introduced the theory of comparative advantage?**\ a) Adam Smith\ **b) David Ricardo**\ c) John Keynes\ d) Paul Samuelson 29. **What does the factor proportions theory explain?**\ a) Consumer preferences\ b) Currency exchange rates\ **c) Trade patterns based on resource endowments**\ d) Industrial monopolies 30. **Which theory incorporates economies of scale into trade analysis?**\ a) Absolute advantage theory\ b) Dependency theory\ **c) New trade theory**\ d) Mercantilism **\ ** **30 Single-Choice Questions on the World Bank, International Monetary Fund (IMF), and World Trade Organization (WTO)** **World Bank** 1. **What is the primary goal of the World Bank?**\ a) Military financing\ b) Promoting international trade\ **c) Reducing global poverty and fostering development**\ d) Managing currency exchange rates 2. **Which of the following is a major focus of the World Bank\'s activities?**\ **a) Providing financial assistance for infrastructure projects**\ b) Supervising global financial markets\ c) Setting global trade tariffs\ d) Regulating capital markets 3. **When was the World Bank established?**\ a) 1930\ b) 1919\ c) 1965\ **d) 1944** 4. **What is the primary lending arm of the World Bank for low-income countries?**\ a) International Monetary Fund\ b) Multilateral Investment Guarantee Agency\ **c) International Development Association (IDA)**\ d) World Trade Organization 5. **Where is the headquarters of the World Bank located?**\ a) Geneva, Switzerland\ b) New York, USA\ **c) Washington, D.C., USA**\ d) Paris, France 6. **Which group of countries primarily benefits from World Bank loans?**\ a) High-income countries\ **b) Low- and middle-income countries**\ c) Oil-exporting nations\ d) Developed nations only 7. **What is the difference between the World Bank and the IMF?**\ a) The IMF focuses on infrastructure projects, and the World Bank manages global trade.\ b) Both institutions are identical in purpose.\ **c) The World Bank focuses on development, while the IMF handles financial stability.**\ d) The IMF only works with private companies. 8. **Which organization within the World Bank Group provides political risk insurance for investments?**\ a) IDA\ b) IFC\ **c) MIGA (Multilateral Investment Guarantee Agency)**\ d) IBRD 9. **What is the primary funding source for the World Bank?**\ a) Donations from individuals\ **b) Borrowing from international financial markets**\ c) Tariffs on trade\ d) Membership fees 10. **What is a key criticism of the World Bank?**\ **a) Its projects sometimes cause environmental and social harm.**\ b) It only operates in high-income countries.\ c) It discourages private investment.\ d) It has no influence on global development. **International Monetary Fund (IMF)** 11. **What is the main purpose of the IMF?**\ a) Financing infrastructure projects\ b) Controlling global trade tariffs\ **c) Ensuring global financial stability**\ d) Regulating labor markets 12. **When was the IMF founded?**\ **a) 1944**\ b) 1950\ c) 1919\ d) 1962 13. **What is a quota in the context of the IMF?**\ a) A limit on trade volume\ **b) A member country\'s financial contribution to the IMF**\ c) A limit on borrowing\ d) A tariff imposed by the IMF 14. **What is a primary tool used by the IMF to stabilize economies?**\ a) Export subsidies\ b) Environmental regulations\ **c) Lending to countries facing balance of payments crises**\ d) Setting interest rates for global banks 15. **Which type of advice does the IMF primarily offer?**\ a) Trade arbitration\ b) Environmental policies\ **c) Macroeconomic policy and financial stability**\ d) Human rights issues 16. **What is a common condition attached to IMF loans?**\ a) Increased foreign aid donations\ **b) Implementation of economic reforms like budget cuts or tax changes**\ c) Increased defense spending\ d) Adoption of a new national currency 17. **What is the IMF\'s Special Drawing Right (SDR)?**\ a) A global tax system\ **b) An international reserve asset used to supplement official reserves**\ c) A fixed exchange rate mechanism\ d) A method of canceling debt 18. **What does the IMF use to fund its operations?**\ a) International trade tariffs\ **b) Quota contributions from member countries**\ c) Sales of natural resources\ d) Foreign aid grants 19. **Where is the headquarters of the IMF located?**\ a) London, UK\ b) Geneva, Switzerland\ c) New York, USA\ **d) Washington, D.C., USA** 20. **Which type of economy does the IMF primarily support?**\ a) Developed economies exclusively\ **b) Economies facing financial crises, regardless of development status**\ c) Economies focused on agriculture\ d) Economies with no trade deficits **World Trade Organization (WTO)** 21. **What is the primary purpose of the WTO?**\ a) Providing development loans\ b) Regulating global financial systems\ **c) Promoting free and fair international trade**\ d) Managing labor migration 22. **When was the WTO established?**\ a) 1975\ b) 1944\ **c) 1995**\ d) 1980 23. **What agreement led to the creation of the WTO?**\ a) The Bretton Woods Agreement\ b) The Paris Peace Accords\ **c) The Uruguay Round of GATT negotiations**\ d) The Maastricht Treaty 24. **Where is the WTO headquartered?**\ a) New York, USA\ b) Paris, France\ **c) Geneva, Switzerland**\ d) Brussels, Belgium 25. **What is the WTO's main legal framework for trade?**\ **a) General Agreement on Tariffs and Trade (GATT)**\ b) IMF Charter\ c) World Bank Guidelines\ d) Universal Trade Code 26. **Which of the following is a key function of the WTO?**\ **a) Settling trade disputes between member countries**\ b) Financing infrastructure projects\ c) Providing economic forecasts\ d) Enforcing labor rights 27. **What principle guides WTO trade negotiations?**\ a) National sovereignty\ **b) Non-discrimination and most-favored-nation treatment**\ c) Fixed exchange rates\ d) Military cooperation 28. **What is a major criticism of the WTO?**\ a) It operates only in developed countries.\ **b) It sometimes undermines environmental and labor protections.**\ c) It has no dispute resolution mechanism.\ d) It opposes free trade. 29. **Which of the following is NOT a key area covered by the WTO?**\ a) Trade in services\ b) Intellectual property rights\ c) Goods trade\ **d) Global monetary policy** 30. **What is a multilateral trade agreement under the WTO?**\ **a) An agreement involving multiple countries to reduce trade barriers**\ b) An advanced bilateral agreement between two countries with further parties\ c) A regional trade package\ d) A fixed exchange rate system for trading parties