International Trade: Theories, Trade Restrictions & Trade Policy, MCQs

Non-tariff barriers to trade include:

A) Quotas

B) Tariffs

C) Export subsidies

D) Voluntary export restraints

Which organization oversees international trade agreements and regulates trade among nations?

A) IMF (International Monetary Fund)

B) WTO (World Trade Organization)

C) World Bank

D) OPEC (Organization of the Petroleum Exporting Countries)

The Most Favored Nation (MFN) principle in trade means that:

A) All countries receive the same trade benefits as the most favored trading partner

B) Certain countries are given preferential treatment in trade agreements

C) Trade agreements are negotiated on a bilateral basis

D) None of the above

Which trade policy aims to protect domestic industries from foreign competition by imposing restrictions on imports?

A) Free trade policy

B) Export-oriented policy

C) Import substitution policy

D) Protectionism

A quota is a:

A) Limit on the amount of a specific good that can be imported

B) Tax levied on imported goods

C) Subsidy given to domestic producers

D) None of the above

Which of the following is an example of a trade barrier?

A) Export subsidy

B) Voluntary export restraint

C) Tariff

D) All of the above

The Infant Industry Argument suggests that:

A) Newly established industries should be protected from foreign competition until they become competitive

B) Free trade benefits only developed countries

C) Import tariffs should be eliminated to promote economic growth

D) None of the above

The principle of reciprocity in trade agreements refers to:

A) Equal treatment of all trading partners

B) Bilateral concessions made by trading partners

C) Unilateral trade liberalization

D) None of the above

Which trade policy encourages export-oriented production to boost economic growth?

A) Import substitution

B) Protectionism

C) Free trade

D) Export-led growth

The Smoot-Hawley Tariff Act of 1930:

A) Reduced tariffs on imports to stimulate international trade

B) Imposed high tariffs on imports, worsening the Great Depression

C) Led to the creation of the WTO

D) None of the above