Caribbean Trade & Exchange Quiz

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Test your understanding of trade, balance of payments, and exchange rates.

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Montex

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Caribbean Trade & Exchange Quiz


Caribbean Trade & Exchange QuizVersión en línea Test your understanding of trade, balance of payments, and exchange rates. por Montex 1 What does comparative advantage explain in international trade? a A country should only export expensive goods b A country should specialise in goods with the lowest opportunity cost c Trade reduces a country's production possibilities d All countries benefit from producing everything 2 Which accounts for the balance of payments? a Production, consumption, and investment accounts b Debt, equity, and currency accounts c Trade, tax, and tariff accounts d Current, capital, and official reserves accounts 3 A depreciation of a currency means: a The currency gains value in the foreign market b Prices of imports rise, but exchange rate stays the same c Exports become more expensive for foreigners d The currency loses value in the foreign exchange market 4 Which policy can reduce a balance of payments deficit? a Removing all import controls b Discounting domestic currency to devalue it c Deflationary monetary policy (higher interest rates) d Increasing aggregate demand via expansionary policy 5 Terms of trade improvement means: a Both export and import prices fall equally b Import prices rise relative to export prices c Export prices rise relative to import prices d Export volumes fall while imports rise 6 Which is a consequence of a balance of payments surplus? a Decline in imports only b Increase in foreign exchange reserves c Rising unemployment d Currency depreciation 7 What primarily drives gains from trade between countries? a Uniform global productivity b Trends in currency speculation c Domestic price controls d Differences in factor endowments and efficiencies 8 What does a fixed exchange rate regime involve? a No government intervention in rates b Rates change only with market forces c The government sets and maintains the rate d Rates are permanently fixed without reserves 9 What effect does a revaluation have on imports? a Exports automatically increase b Imports become more expensive c Imports become cheaper for residents d Trade balance becomes zero 10 Which factor can cause currency appreciation? a Higher interest rate attracting foreign capital b Decrease in domestic income c Domestic inflation rising relative to abroad d Widespread import substitution

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Caribbean Trade & Exchange Quiz

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Caribbean Trade & Exchange QuizVersión en línea

por Montex

What does comparative advantage explain in international trade?

Which accounts for the balance of payments?

A depreciation of a currency means:

Which policy can reduce a balance of payments deficit?

Terms of trade improvement means:

Which is a consequence of a balance of payments surplus?

What primarily drives gains from trade between countries?

What does a fixed exchange rate regime involve?

What effect does a revaluation have on imports?

Which factor can cause currency appreciation?