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CA Foundation International Trade — practice questions

Explore 60 free International Trade questions in CA Foundation Business Economics. Open each question or exercise to read its content, reference answers and available explanation.

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International Trade questions and exercises with answers

Showing questions 1–30 of 60.

What is international trade?Read the answer and worked solution →A product sold by a party in one country to a party in another is called what from the seller's side?Read the answer and worked solution →From the viewpoint of the country that receives a product bought from abroad, that product is called what?Read the answer and worked solution →In which part of the balance of payments are merchandise exports and imports of goods accounted for?Read the answer and worked solution →Which body works to facilitate trade between nations?Read the answer and worked solution →Cross-border trade compared with domestic trade is:Read the answer and worked solution →Across borders, capital and labour are:Read the answer and worked solution →Which of these is a service that is traded internationally?Read the answer and worked solution →Which principle shows even a more productive country gains from trade?Read the answer and worked solution →Under comparative advantage, a country should devote more resources to the activity with the lowest what?Read the answer and worked solution →Absolute advantage concerns which of the following?Read the answer and worked solution →Who developed the classical theory of comparative advantage in 1817?Read the answer and worked solution →Who first alluded to absolute advantage as the basis for international trade, in 1776?Read the answer and worked solution →Whose 1815 Essay on the External Corn Trade has an early use of comparative advantage?Read the answer and worked solution →In Ricardo's famous illustration, which two countries trade wine and cloth?Read the answer and worked solution →Portugal makes both goods with less labour than England, so it has:Read the answer and worked solution →In the Ricardian model, what mainly determines the pattern of trade?Read the answer and worked solution →What does the term terms of trade mean?Read the answer and worked solution →Under specialisation, mutually beneficial terms of trade lie between what?Read the answer and worked solution →X gives up 2 tea per rice, Y gives up 3 tea per rice. Who has the edge in rice?Read the answer and worked solution →Which economist reformulated comparative advantage in opportunity cost terms in 1930?Read the answer and worked solution →Haberler brought which curve into international trade theory?Read the answer and worked solution →Which model is a factor proportions model of comparative advantage?Read the answer and worked solution →The Heckscher–Ohlin model could not explain which kind of trade?Read the answer and worked solution →The doctrine of comparative advantage emerged as a response to debate over which British law of 1815?Read the answer and worked solution →What is a tariff?Read the answer and worked solution →Who ordinarily pays a tariff on imported goods at the border?Read the answer and worked solution →An export tax, when levied, is paid by whom?Read the answer and worked solution →A tariff set as a percentage of the import price is an example of which kind of tariff?Read the answer and worked solution →Besides raising revenue, why are import duties imposed?Read the answer and worked solution →

Worked practice questions

What is international trade?

  1. Distribution of goods inside a single large firm
  2. Exchange of goods only within one country's states
  3. Lending of money by a bank to its own customers
  4. Exchange of goods, services and capital across borders
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Correct answer: D. Exchange of goods, services and capital across borders

International trade covers capital, goods and services crossing national borders because a need or demand exists abroad.

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A product sold by a party in one country to a party in another is called what from the seller's side?

  1. An import
  2. An export
  3. A transit good
  4. A re-sale
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Correct answer: B. An export

Goods sent out from the originating country to a buyer abroad are its exports.

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From the viewpoint of the country that receives a product bought from abroad, that product is called what?

  1. A subsidy
  2. A quota
  3. An import
  4. An export
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Correct answer: C. An import

A good bought from a foreign seller is an import for the receiving country.

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