(8.) Economics Hl. International Economics, Definitions.

37 Questions | By IBLindman | Updated: Mar 22, 2022 | Attempts: 135

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IB Economics HL. Definitions QUIZ. Section 4. International economics.

Questions and Answers

1.

Define "free trade" using three words!
2.

The actual number of goods and services in and out of your country is known as a country's ...
- A.
  
  Trade mass
- B.
  
  Trade volumes
- C.
  
  Terms of trade
- D.
  
  Net exports
3.

Write down the three letters signifying a multinational corporation (that have production in at least two countries)
4.

"(Index of export prices / Index of import prices) * 100 What is being defined?
- A.
  
  Exchange rate
- B.
  
  Trade volumes
- C.
  
  Balance of payments
- D.
  
  Terms of trade
5.

A country has [...] in producing a good over another, if it has a lower opportunity cost of producing that good.
6.

A country has absolute advantage in producing a good over another if it is able to produce the good using fewer [...]
7.

"When a country imposes trade barriers to protect the incomes of domestic producers" What is specifically being defined above?
- A.
  
  Quota
- B.
  
  Embargo
- C.
  
  Subsidy
- D.
  
  Protectionism
8.

Define "tariff" using three words!
9.

A total ban on trade is known as a(n)
- A.
  
  Subsidy
- B.
  
  Quota
- C.
  
  Embargo
- D.
  
  Tariff
10.

A domestic government adjusts exchange rates to obtain unfairly low prices in order to protect domestic producers. This is known as ...
- A.
  
  Voluntary export restraints
- B.
  
  Import licensing
- C.
  
  Administrative barriers
- D.
  
  Exchange controls
11.

"A physical limit imposed on the amount of a good/service that may be imported" What is being defined?
12.

A government may give producers a payment in order to lower prices for consumers and increase the quantity of domestic goods produced. This payment is known as a ...
13.

"An account of a country's transactions with the rest of the world" What, specifically, is being defined?
- A.
  
  Capital account
- B.
  
  Balance of payments
- C.
  
  Current account
14.

An area with no protectionism where goods and services move freely between borders can simply be defined as a "free trade area"
- A.
  
  True
- B.
  
  False
15.

A free trade area where the countries lack sovereignty (there is a government body over all countries involved) is known as a(n) ...
16.

A customs union where the four factors of production can move freely over borders is known as a(n) ...
17.

A common market where member countries have common economic policies and either a fixed exchange rate or a common currency is known as a(n)
18.

"When a trade agreement leads to production being switched from a low-cost producer to a high-cost producer" What is being defined?
- A.
  
  Trade creation
- B.
  
  Trade diversion
- C.
  
  Protectionism
- D.
  
  Dirty float
19.

The opposite of trade diversion - "when a trade agreement leads to production being switched from a high-cost producer to a low-cost producer" is known as ...
20.

A country's exchange rate is the rate at which the country's currency trades for another on the ...
21.

When the exchange rate is determined solely by market forces (supply and demand), it is said to be ...
22.

"Any fall in the value of a domestic currency" What is being defined?
- A.
  
  Devaluation
- B.
  
  Revaluation
- C.
  
  Depreciation
- D.
  
  Appreciation
23.

Write down the term signifying the "guessing" of what exchange rates are going to do
24.

"When a government buys or sells its own currency (by using gold reserves or foreign currency reserves) in order to stabilize the currency" What is this behavior called?
- A.
  
  Dirty boat
- B.
  
  Dirty float
- C.
  
  Dirty throat
- D.
  
  Kashmir goat
25.

PPP (Purchasing power parity) is a theory that argues that the exchange rate will always adjust itself to equal ...