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12th Standard Economics International Economics English Medium Free Online Test One Mark Questions 2020 - 2021

12th Standard

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Economics

Time : 00:20:00 Hrs
Total Marks : 20

    Answer all the questions

    20 x 1 = 20
  1. Trade between two countries is known as ____ trade

    (a)

    External

    (b)

    Internal

    (c)

    Inter-regional

    (d)

    Home

  2. Favourable trade means value of exports are ________ Than that of imports.

    (a)

    More

    (b)

    Less

    (c)

    More or Less

    (d)

    Not more than

  3. BOP includes

    (a)

    visible items only

    (b)

    invisible items only

    (c)

    both visible and invisible items

    (d)

    merchandise trade only

  4. Foreign direct investments not permitted in India

    (a)

    Banking

    (b)

    Automic energy

    (c)

    Pharmaceutical

    (d)

    Insurance

  5. Comparative cost advantages was developed by

    (a)

    Adam Smith

    (b)

    Ricardo

    (c)

    T.S.Mill

    (d)

    J.R.Hicks

  6. The opportunity cost of one DVD in China is

    Country Tons of steel DVDs
    China 80 40
    India 20 20
    (a)

    One-half ton of steel

    (b)

    One ton of steel

    (c)

    One and one-half tons of steel

    (d)

    Two tons of steel

  7. According to the principle of comparative advantage

    Country Tons of steel DVDs
    China 80 40
    India 20 20
    (a)

    China should export steel

    (b)

    China should export steel and DVDs

    (c)

    India should export steel

    (d)

    India should export steel and DVDs

  8. With international trade, what would be the maximum number of DVDs that India would be willing to export to China in exchange for each ton of steel

    Country Tons of steel DVDs
    China 80 40
    India 20 20
    (a)

    One DVD

    (b)

    Two DVDs

    (c)

    Three DVDs

    (d)

    Four DVDs

  9. According to the classical theory of international trade:

    (a)

    Only countries with low wages will export

    (b)

    Only countries with high wages will import

    (c)

    Countries with high wages will have higher prices

    (d)

    All the above are false

  10. Absolute advantage is determined by

    (a)

    actual differences in labor productivity between countries

    (b)

    relative differences in labor productivity between countries.

    (c)

    both (a) and (b)

    (d)

    neither (a) nor (b)

  11. According to the factor endowment model of Heckscher and Ohlin, countries heavily endowedwith land will:

    (a)

    Devote excessive amounts of resources to agricultural production

    (b)

    Devote insufficient amounts of resources to agricultural production.

    (c)

    Export products that are land-intensiveImport products that are land-intensive

    (d)

    Import products that are land-intensive

  12. According to the Heckscher-Ohlin model

    (a)

    everyone automatically gains from trade

    (b)

    the gainers from trade outnumber the losers from trade

    (c)

    the scarce factor necessarily gains from trade

    (d)

    none of the above

  13. The most widely traded currency in the foreign exchange market is the

    (a)

    euro

    (b)

    Chinese yuan

    (c)

    British pound

    (d)

    U.S. dollar

  14. Under a fixed exchange rate system, ___________ are official changes in the value of a country's currency relative to other currencies

    (a)

    devaluation

    (b)

    Depreciation and appreciation

    (c)

    revaluation

    (d)

    Both a and b.

  15. Assertion (A): According to HO theorem, a country can gain from trade when it produces at relatively lower costs
    Reason (R): Even when a country enjoys absolute advantage in both goods, the country would specialize in the production and export of those goods which are relatively more advantageous.

    (a)

    Both A and R are true and R is the correct explanation of A.

    (b)

    Both A and R are true but R is not the correct explanation of A.

    (c)

    A is true but R is false.

    (d)

    A is false but R is true.

  16. Assertion (A): Viner has devised another concept called ‘‘the single factoral terms of trade’’ as an improvement upon the commodity terms of trade.
    Reason (R): It represents the ratio of exportprice index to the import-price index adjusted for changes in the productivity of a country’s factors in the production of exports.

    (a)

    Both A and R are true and R is the correct explanation of A.

    (b)

    Both A and R are true but R is not the correct explanation of A.

    (c)

    A is true but R is false

    (d)

    A is false but R is true

  17. The balance on current account
    I equals the absolute value of the balance on capital account.
    II is financed by savings.
    III is net grants minus remittances.
    IV includes goods, services, and unilateral transfers.

    (a)

    I and II only.

    (b)

    II and III only

    (c)

    I and IV only

    (d)

    None of the above

  18. India has a comparative cost advantage in

    (a)

    textiles

    (b)

    steel

    (c)

    both of them

    (d)

    none of them

  19. Match the correct codes

    1 Mercantilism i Takes an usversus- them
    view of trade
    2 Free Trade theories ii Absolute Advantage
    3 Free Trade refined iii David Ricardo
    4 Comparative Advantage iv Heckscher - Ohlin
    (a)

    (1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

    (b)

    (1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

    (c)

    (1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

    (d)

    (1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

  20. Match the correct codes

    1 Monetary measures i Import Duties
    2 Export Promotion ii Foreign Loans
    3 Import Control iii Abolition / reduction of duties
    4 Miscellaneous Measures iv Monetary Contraction / Expansion
    (a)

    (1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

    (b)

    (1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

    (c)

    (1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

    (d)

    (1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

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