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International Trade MCQ With Answers

Part 2: Multiple Choice Questions on International Trade Theory

__________ try to explain why trade takes place between countries.

A. International Trade Firms

B. International Trade Theories

C. International Trade Blocks

D. IBRD

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B. International Trade Theories

Trade theories are classified into ______ trade theories and modern trade theories.

A. Regional

B. Classical

C. Local

D. Ancient

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B. Classical

_____ is the oldest trade theory.

A. Comparative Cost Advantage Theory

B. Hecksher Ohlin Theory

C. Product Life Cycle Theory

D. Theory of mercantilism

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D. Theory of mercantilism

_______ argues that countries enter into trade to earn gold and silver,

A. Theory of mercantilism

B. Theory of absolute advantage

C. Product Life Cycle Theory

D. Hecksher Ohlin Theory

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A. Theory of mercantilism

______ suggests that each country should specialize in producing only those goods which it can produce efficiently.

A. Theory of mercantilism

B. Theory of absolute advantage

C. Product Life Cycle Theory

D. Hecksher Ohlin Theory

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B. Theory of absolute advantage

Theory of absolute advantage is propagated by ______.

A. Philip Kotler

B. Adam Smith

C. Peter Drucker

D. David Ricardo

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B. Adam Smith

Theory of comparative advantage was given by ______

A. Philip Kotler

B. Adam Smith

C. Peter Drucker

D. David Ricardo

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D. David Ricardo

_________ stresses on the ‘relative cost difference’ rather than ‘absolute cost difference’ between the goods as the basis for carrying out trade.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

B. Theory of comparative advantage

Factor endowments theory of international trade is also known as _______

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

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C. Hecksher Ohlin Theory

________ advocates that a country should focus and specialize in the production of goods that it can produce relatively at a lower cost than other countries.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

B. Theory of comparative advantage

______ explains that the countries acquire comparative advantages due to differences in the national factor endowments like land, labour and capital.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

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C. Hecksher Ohlin Theory

International product life cycle theory was given by ______.

A. Raymond Vernon

B. David Ricardo

C. Michael Porter

D. Adam Smith

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A. Raymond Vernon

National competitive advantage also called as_____.

A. Gold Model

B. Silver Model

C. Diamond Model

D. Platinum Model

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C. Diamond Model

According to ‘New Trade Theory’ a firm acquires export competitiveness due to _______.

A. Specialization and economies of scale

B. Being the first mover in the market

C. Government support

D. All of the above

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D. All of the above

National competitive advantage theory of international trade was given by_____

A. Raymond Vernon

B. David Ricardo

C. Michael Porter

D. Adam Smith

View Answer

A. Raymond Vernon

This is all about MCQ on International Trade, International Trade Theories and Foreign Trade.

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