Question

Consider two countries J and K. Both of them have equal amount of gross domestic product (GDP) measured in USA dollars. If the cost of living is cheaper in country K than in country J, which country do you think has a larger GDP in Purchasing Power Parity (PPP) measured in international dollars?

		a) It is difficult to know this
		b) Both have still equal GDP PPP
		c) Country J
		d) Country K

When we say ‘Trade is pro-competition’, what does it mean?

		a) Trade is more helpful for small countries than the large ones
		b) It is not clear what it means
		c) Trade enhances competition among trading countries and also globally
		d) Trade reduces competition among countries

The two major categories of trade protection measures (barriers) are:

		a) Tariff and subsidy
		b) Tariff and quota
		c) Tariff and non-tariff barriers
		d) Tariff and technical barriers

Goods and services produced by economic agents in one country and sold to other countries

		a) Import
		b) Export
		c) Both import and export

One of the top three most traded products is:

		a) Mobile phones
		b) Food and agricultural products
		a) Perfume and related products
		b) Petroleum

A country’s gain or benefit from free trade in the form of economic growth is called___________:

		a) Consumer surplus
		b) Static economic gain
		c) Producer surplus
		d) Dynamic economic gain

An economic gain from free trade in the form of increased consumption of goods and service is called……

		a) Dynamic gain
		b) Political gain
		c) Static gain
		d) All of the above

If there are two countries – small and large in geographic area - which one will be more open to international trade?

		a) The large country
		b) Openness does not depend on a size of a country
		c) The small country

How does trade affect the economy of a country or countries?

		a) Enables import of capital goods and transfer of technology
		b) It enhances competition among industries
		c) It helps to create and expand markets for products
		d) All of the above

The economic theory that suggests international division of labour and specialization of production and exchange based on Absolute Advantage of countries was first developed by:

		a. David Ricardo
		b. Adam Smith
		c. John Keynes
		d. It is known who developed this

In the last 20 or so years which geographic region has achieved the highest increase in progress or the value of international trade?

		a) Middle East
		b) Europe
		c) North America
		d) Asia (including Australia and New Zealand)
		e) Latin America

The maximum tariff level that countries promise to impose on imports from other world trade organization (WTO) member countries is:

		a) Harmonized tariff
		b) Bound tariff
		c) Preferential tariff
		d) Most Favored Nation (MFN) Tariff

Answer 1

1. The country which has a larger GDP in Purchasing Power Parity (PPP) is country k as the residents of country k will have more purchasing power than any other residents of other countries. Hence a larger GDP in PPP
2. Trade is pro competition means that  Trade is more helpful for small countries than the large ones as because of trade the country can focus on specialization and which reduces the overall cost of producing a good and therefore that country can produce higher surplus. And over all the country can benefit from better quality products at lower prices.
3. The two major categories of trade protection measures (barriers) are: tariff and non-tariff barriers.
4. Goods and services produced by economic agents in one country and sold to other countries are called exports, whereas imports are goods and services bought in a country