Miscellaneous Economic MCQs

Which economic theory suggests that countries should specialize in producing goods where they have a comparative advantage?

A) Mercantilism

B) Absolute advantage

C) Comparative advantage

D) Protectionism

What is the main objective of trade barriers such as tariffs and quotas?

A) Promote international cooperation

B) Protect domestic industries from foreign competition

C) Increase foreign direct investment

D) Expand global supply chains

Which financial institution provides financial assistance to countries facing balance of payments crises?

A) World Bank

B) International Monetary Fund (IMF)

C) World Trade Organization (WTO)

D) Asian Development Bank (ADB)

Which exchange rate system allows currencies to fluctuate based on supply and demand in foreign exchange markets?

A) Fixed exchange rate system

B) Floating exchange rate system

C) Pegged exchange rate system

D) Managed exchange rate system

What is the primary purpose of foreign direct investment (FDI)?

A) Speculate on currency exchange rates

B) Promote international trade agreements

C) Acquire ownership or control of foreign assets

D) Provide short-term loans to developing countries

Who is considered the founder of modern economics and author of “The Wealth of Nations”?

A) Karl Marx

B) John Maynard Keynes

C) Adam Smith

D) David Ricardo

The Great Depression of the 1930s led to the development of which economic theory advocating for government intervention in the economy?

A) Monetarism

B) Supply-side economics

C) Keynesian economics

D) Austrian economics

The concept of “invisible hand” in economics refers to:

A) Government intervention in markets

B) Self-regulating nature of competitive markets

C) Economic planning by central authorities

D) Redistribution of wealth

Which economic theory emphasizes the importance of monetary policy in stabilizing the economy?

A) Monetarism

B) Marxism

C) Neoclassical economics

D) Rational choice theory

Which economist introduced the concept of “comparative advantage” to explain the benefits of international trade?

A) David Ricardo

B) John Maynard Keynes

C) Friedrich Hayek

D) Milton Friedman