Have an account?
Skip to Content
Build your own quiz
Suggestions for you
54 questions
Show Answers
See Preview
- 1. Multiple Choice
The principle of comparative advantage shows:
that nations can benefit from specialisation and trade even if they do not have an absolute advantage.
that nations ought to operate as closed economies.
that nations ought to concentrate on the production of only one commodity that will give a surplus that can be traded.
that nations can only benefit from multilateral trade.
- 2. Multiple Choice
A country (A) has an absolute advantage over another country (B) in the production of
coal if:
A’s total output of coal is greater than B’s.
A can produce more coal over a year.
there is more demand for coal in A.
A can produce coal at lower resource cost per unit than B.
- 3. Multiple Choice
The principle of comparative advantage shows that the benefits of trade rely on:
resource costs.
opportunity cost.
marginal costs.
transport costs.
- 4. Multiple Choice
Australia’s main trading partners are:
Russia and China.
New Zealand and the USA.
China and Japan.
China and the USA.
- 5. Multiple Choice
International trade increases the standard of living of a country because it:
increases the range of goods and services available.
enables the government to increase its revenue through the collection of tariffs.
creates employment in import-competing industries.
overcomes high transportation costs.
- 6. Multiple Choice
A nation will gain if:
exports increase and imports decrease.
exports decrease and imports increase.
both exports and imports increase.
both exports and imports decrease
- 7. Multiple Choice
When a country exports:
domestic producers gain and domestic consumers gain.
domestic producers lose and domestic consumers gain.
domestic producers gain and domestic consumers lose.
.
domestic producers lose and domestic consumers lose
- 8. Multiple Choice
Australian exports are classified into four sectors. The ranking of these export sectors, from largest to smallest is:
services, manufacturing, mining, agriculture.
mining, services, manufacturing, agriculture.
manufacturing, mining, services, agriculture.
mining, manufacturing, services, agriculture
- 9. Multiple Choice
The fundamental economic advantage of free world trade is:
the easing of political tensions between nations.
all nations will develop similar industries.
all nations will share equally in the world’s wealth.
a more efficient allocation of resources.
- 10. Multiple Choice
International trade is said to be due to differences in countries’ comparative costs, which refers to:
A the relative efficiency of production of goods in different countries.
B prices of exported goods compared to the price of imported goods
C the average cost of making different goods in one country.
D the relative amounts of immobile resources used in different countries in the manufacture of export goods.
- 11. Multiple Choice
International trade takes place because of:
inequalities in factor endowments between nations.
governments’ desires to protect their industries.
differences in price levels in various countries.
inequalities in the terms of trade.
- 12. Fill in the Blank
Trade between affiliates of the one organisation; for example, between a home-based subsidiary and a foreign-based subsidiary of the same company
- 13. Fill in the Blank
The ability of a nation to produce commodities more efficiently than another nation
- 14. Fill in the Blank
The knowledge, experience and skills of individuals, in which nations must invest if they are to advance
- 15. Fill in the Blank
Goods that enter Australia from overseas
- 16. Fill in the Blank
The supply of the factors of production (land, labour, capital and enterprise) that exists in a country
- 17. Fill in the Blank
The specific use of resources in narrowly defined economic activities
- 18. Fill in the Blank
The ability of a nation to produce a product at a lower opportunity cost of production than another nation
- 19. Fill in the Blank
The situation in which there are no unwanted movements of foreign reserves in the balance of payments
(The balance of payments summarises the economic transactions of an economy with the rest of the world. These transactions include exports and imports of goods, services and financial assets, along with transfer payments like foreign aid)
- 20. Fill in the Blank
Trade advantage obtained through the capacity of a nation’s industries to innovate and upgrade
- 21. Fill in the Blank
Any nation that trades with other nations
- 22. Multiple Choice
The concept of ‘opportunity cost’ highlights the benefits that can be gained from world trade.
True
False
- 23. Multiple Choice
To enjoy the benefits of specialisation, countries need to trade.
True
False
- 24. Multiple Choice
Exports are a leakage from the circular flow of income model because goods are sent overseas.
True
False
- 25. Multiple Choice
A country that has an absolute advantage in the production of all goods cannot gain from specialisation and trade.
True
False
- 26. Multiple Choice
Different countries have a comparative advantage
True
False
- 27. Multiple Choice
Consumers gain when a business exports a good to overseas nations.
True
False
- 28. Multiple Choice
An open economy is one that trades freely with the rest of the world.
True
False
- 29. Multiple Choice
Revenue from exports is considered to be a leakage from the circular flow.
True
False
- 30. Multiple Choice
Multinational corporations produce more than 25 per cent of global production.
True
False
- 31. Fill in the Blank
include a comma and space for each option
- 32. Multiple Choice
For Riverland, what is the opportunity cost of producing 1 unit of consumer goods?
0.33 Capital goods
0.5 Capital goods
2 Consumer goods
3 Consumer goods
- 33. Multiple Choice
For Bushland, what is the opportunity cost of producing 1 unit of consumer goods?
0.33 Capital goods
0.5 Capital goods
2 Consumer goods
3 Consumer goods
- 34. Multiple Choice
Which country has a comparative advantage in the production of consumer goods?
Riverland
Bushland
- 35. Multiple Choice
For Riverland, what is the opportunity cost of producing 1 unit of capital goods?
0.33 Capital goods
0.5 Capital goods
2 Consumer goods
3 Consumer goods
- 36. Multiple Choice
For Bushland, what is the opportunity cost of producing 1 unit of capital goods?
0.33 Capital goods
0.5 Capital goods
2 Consumer goods
3 Consumer goods
- 37. Multiple Choice
For Bushland, what is the opportunity cost of producing 1 unit of capital goods?
Riverland
Bushland
- 38. Multiple Choice
According to Okun's law, the target range for inflation and unemployment is:
0% inflation and 0% unemployment
2-3% inflation and 5-6% unemployment
5-6% inflation and 2-3% unemployment
5-7% inflation and 1-2% unemployment
- 39. Open Ended
Explain the advantages and disadvantages of international trade.
- 40. Open Ended
Explain how the principle of competitive advantage may apply to Australia
- 41. Open Ended
Based on the principles of absolute and comparative advantage explain how can trade between two nations be mutually beneficial?
- 42. Open Ended
Identify and discuss factors that have contributed to globalisation and current international trade patterns.
(eg. technology; multi-national corporations; regional trading blocs; and deregulation of financial capital markets and of non-government institutions, e.g. the World Trade Organization, International Monetary Fund and World Bank)
- 43. Multiple Choice
Globalisation of production is
moving production offshore to achieve rst-mover advantages.
moving production offshore to reduce the risk of exchange rate changes.
dispersing the different phases of production to more than one country.
dispersing the different phases of production to different foreign locations to reduce management costs.
- 44. Multiple Choice
Developments that have supported the expansion of international business are:
the advances in information and communications technology.
the liberalisation of trade and investment.
the privatisation of government business enterprises.
all of the above.
- 45. Multiple Choice
Which of the following has occurred because of globalisation?
There has been an increase in financial capital flows.
The divergence in world economic systems has increased.
Global poverty has increased.
There has been a trend towards increased regulation in global markets
- 46. Multiple Choice
If the Australian dollar were depreciated by 10 per cent, which one of the following
would not be true?
Imported Japanese motor vehicles would cost more in the Australian market.
Imported Japanese motor vehicles would cost less in the Australian market.
Japanese buyers would pay less for Australian wool.
Australian consumers would be encouraged to buy locally manufactured goods
- 47. Multiple Choice
Under Australia’s oating exchange rate system, the Reserve Bank of Australia acts in
the foreign exchange market to:
encourage speculation in the Australian dollar.
prevent excessive movements in the value of the Australian dollar.
fix the value of the Australian dollar.
achieve a target exchange rate.
- 48. Multiple Choice
An appreciation of the exchange rate of the Australian dollar means that:
more Australian dollars are needed to buy one US dollar.
one Australian dollar can buy more US dollars.
the Australian dollar has been devalued.
there has been a fall in the trade-weighted index
- 49. Multiple Choice
Appreciation of the Australian dollar is most likely to:
increase the value of foreign currency in terms of the Australian currency.
make Australia less attractive to foreign investment.
lower the value of overseas reserves.
all of the above.
- 50. Multiple Choice
Which of the following will occur if the Reserve Bank of Australia increases domestic
interest rates?
increased financial inflows leading to an appreciation
decreased financial inflows leading to a depreciation
decreased financial inflows leading to an appreciation
increased financial inflows leading to a depreciation
- 51. Multiple Choice
If the Australian dollar appreciated against the euro, then one result would be that:
Australian wool would be more expensive in Germany.
French tourists would receive more Australian currency in exchange for euros.
the demand for Australian goods by the Netherlands would increase.
all of the above
- 52. Multiple Choice
Which of the following increases the demand for Australian dollars on the foreign exchange market?
Australian imports of goods and services
interest and dividend payments to US firms
purchases of military equipment overseas by the Australian Government
interest and dividend payments from overseas to Australian firms
- 53. Multiple Choice
The Reserve Bank of Australia can increase the level of the Australian dollar by:
reducing interest rates in the Australian economy.
increasing the level of government expenditure.
buying Australian dollars on the foreign exchange market.
reducing the level of lending of domestic banks.
- 54. Multiple Choice
An ‘Economic Union’ is: .
the financial system of a nation that displays only minor fluctuations in output growth and exhibits a consistently low inflation rate.
the removal or reduction of restrictions or barriers on the free exchange of goods between nations; barriers include tariffs.
a type of trade bloc which is composed of a common market with a customs union.
the ability of a nation to produce a product at a lower opportunity cost of production than another nation
- Answer choicesTagsAnswer choicesTags