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International Economics

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Question: How might a country improve its terms of trade?

  1. a.
    by improving the productivity of its exports industries
  2. b.
    by imposing quotas on importerd goods
  3. c.
    by allowing its currency to depreciate
  4. d.
    by imposing tariffs on imported goods
  5. e.
    none of these
Answer: d

Question: The most important source of export earning for Bangladesh is--

  1. a.
    Jute and jute goods
  2. b.
    Manpower
  3. c.
    Ready Made Garments
  4. d.
    Capital machineries
  5. e.
    Fish and fish goods
Answer: c

Question: The country which consumes the most petroleum is--

  1. a.
    China
  2. b.
    USA
  3. c.
    Germany
  4. d.
    India
Answer: b

Question: Why might a 10% devaluation of a country's currency fail to improve its balance of trade deficit?

  1. a.
    Other countries devalue their currencies by 15%
  2. b.
    Other countries revalue their currencies by 15%
  3. c.
    The demand for the country's imports is elastic
  4. d.
    The supply for the country's exports is elastic
  5. e.
    None of them
Answer: a

Question: 'Every country will import those goods which's cost of production is higher'. This speech has been quoted from of--

  1. a.
    Absolute cost difference theory
  2. b.
    Comparative cost difference theory
  3. c.
    Iso cost difference theory
  4. d.
    All of these
  5. e.
    None of these
Answer: b

Question: In the absence off-setting changes, what would be likely to increase if a country's exchange rate appreciates?

  1. a.
    the level of unemployment
  2. b.
    the rate of domestic inflation
  3. c.
    the cost of imported raw materials
  4. d.
    the volume of manufacturing exports
  5. e.
    none of them
Answer: c

Question: Reduction of foreign exchange of domestic currency in terms of foreign currency is called--

  1. a.
    Inflation
  2. b.
    Deflation
  3. c.
    Devaluation
  4. d.
    Reduction of money supply
  5. e.
    None
Answer: c

Question: Which of the following statements is correct for an open economy that has a fixed exchange rate?

  1. a.
    The domestic money supply is affected by the balance of payments
  2. b.
    Its inflation rate is unaffected by inflation rates in the rest of the world
  3. c.
    Interest rates are determined solely by the domestic demand for and supply of credit
  4. d.
    A current account deficit is always matched by net inflows of private capital
  5. e.
    None of the above
Answer: a

Question: Which ministry is related to the export promotion bureau?

  1. a.
    Trade and commerce
  2. b.
    Finance
  3. c.
    Industrial
  4. d.
    Agricultural
  5. e.
    None
Answer: a

Question: What will happen if a country allows its exchange rate to float freely?

  1. a.
    Foreign exchange reserves will no longer be needed
  2. b.
    Inflation will follow the trend of inflation in the country's trading partners
  3. c.
    The current account of the balance of payments will alwayes balanced
  4. d.
    The monetary authorities will lose their ability to control the money supply
  5. e.
    None of the above
Answer: a

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