International Economics Model Questions

12th Standard EM

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Economics

Time : 01:00:00 Hrs
Total Marks : 50
    10 x 1 = 10
  1. Which of the following is a modern theory of international trade?

    (a)

    absolute cost

    (b)

    comparative cost

    (c)

    Factor endowment theory

    (d)

    none of these

  2. Net export equals _______.

    (a)

    Export x Import

    (b)

    Export + Import

    (c)

    Export - Import

    (d)

    Exports of services only

  3. If there is an imbalance in the trade balance (more imports than exports), it can be reduced by

    (a)

    decreasing customs duties

    (b)

    increasing export duties

    (c)

    stimulating exports

    (d)

    stimulating imports

  4. Which of the following is not an example of foreign direct investment?

    (a)

    the construction of a new auto assembly plant overseas

    (b)

    the acquisition of an existing steel mill overseas

    (c)

    the purchase of bonds or stock issued by a textile company overseas

    (d)

    the creation of a wholly owned business firm overseas

  5. International trade was developed by

    (a)

    Adam Smith and Ricardo

    (b)

    Eli Heckscher and Bertil Ohlin

    (c)

    Ricardo and A.C. Pigou

    (d)

    Adam Smith and Ohlin

  6. _________ is one of the types of BoP disequilibrium.

    (a)

    Income terms of trade

    (b)

    Devaluation

    (c)

    Structural

    (d)

    FDI

  7. _________ refers to foreign currencies.

    (a)

    BOT

    (b)

    FOREX

    (c)

    BOP

    (d)

    FUND

  8. A country's _________ also determines the exchange rate.

    (a)

    Terms of trade

    (b)

    Trade

    (c)

    Policy issue

    (d)

    Internal trade

  9. Which of the following is not a subject matter of economics?

    (a)

    Pure Theory of Trade

    (b)

    International Cartels and Trade Blocs

    (c)

    Fiscal Federalism

    (d)

    International Financial and Trade Regulatory Institutions

  10. The modern theory of international trade explains the causes for …………….?

    (a)

    comparative cost difference

    (b)

    absolute cost difference

    (c)

    comparative cost similarities

    (d)

    absolute cost similarities

  11. 5 x 2 = 10
  12. What is the main difference between Adam Smith and Ricardo with regard to the emergence of foreign trade?

  13. Define Terms of Trade.

  14. Define Comparative Cost Advantage.

  15. List out the types of BOP Disequilibrium.

  16. What do you mean by exchange control?

  17. 5 x 3 = 15
  18. Write a brief note on flexible exchange rate.

  19. State the objectives of Foreign Direct Investment.

  20. What are the Determinants of Exchange Rates?

  21. What are the major sectors benefited from FDI in India?

  22. List the assumption of Comparative advantage theory of international trade.

  23. 3 x 5 = 15
  24. Explain the relationship between Foreign Direct Investment and Economic development.

  25. Explain the disadvantages of FDI.

  26. List the offers of International specialization

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