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Top 50 International Trade MCQ With Answers

This post covers top 50 International Trade MCQ with answers. These updated MCQs will definitely help MBA, BBA, B Com, M Com, MMS, PGDM, and International Business specialization students.

These International Trade multiple choice questions can be used for NET, SET, PH. D., and other competitive entrance exams. These MCQs cover MCQ on sub-topics like foreign trade, multinational trade, or global trade.

MCQ on Introduction to International Trade

International trade contributes and increases the world _________

A. Population

B. Inflation

C. Economy

D. Trade Barriers

View Answer

C. Economy

The ratio of trade to GDP was as high as _________ in 1913.

A. 22.1

B. 11.2

C. 26.3

D. 33.2

View Answer

A. 22.1

Free international trade maximizes world output through________.

A. Countries reducing various taxes imposed.

B. Countries specializing in production of goods they are best suited for.

C. Perfect competition between countries and other special regions

D. The diluting the international business laws & conditions between countries.

View Answer

B. Countries specializing in production of goods they are best suited for.

Domestic company limits it’s operations to ___________ political boundaries.

A. International

B. National

C. Transnational

D. Global

View Answer

B. National

Trade between two or more than two countries is known as ________.

A. Internal Business

B. External Trade

C. International Trade

D. Unilateral Trade

View Answer

C. International Trade

_____refers to the tax imposed on imports.

A. Imported Tax

B. Tariffs

C. Subsidies

D. Import Quotas

View Answer

B. Tariffs

_____ means selling the products at a price less than on going price in the market.

A. Quota

B. Tariff

C. Subsidy

D. Dumping

View Answer

D. Dumping

_______is the oldest International Trade theory.

A. Country Similarity Theory

B. Theory of Absolute Cost advantage

C. Product Life Cycle Theory

D. Mercantilism Theory

View Answer

D. Mercantilism Theory

A voluntary export restraint is the opposite form of _____.

A. Import quotas

B. International tariffs

C. Subsidies

D. Dumping

View Answer

A. Import quotas

The international trade between ___________ is like a vast game of beggar my neighbor.

A. Exporter & Importer

B. Two Countries

C. Two world wars

D. Country’s allies and enemies

View Answer

C. Two world wars

_____ provided a series of ’rounds’ of negotiations by which tariffs were reduced.

A. IMF

B. NAFTA

C. IBRD

D. GATT

View Answer

D. GATT

______ happens when Imports are more than exports.

A. Trade barrier

B. Trade deficit

C. Trade surplus

D. Trade contract

View Answer

B. Trade deficit

______ happens when Exports are more than imports.

A. Trade barrier

B. Trade deficit

C. Trade surplus

D. Trade contract

View Answer

C. Trade surplus

BOP stands for ________.

A. Bank of Payments

B. Barrier of Payments

C. Bill of Payments

D. Balance of Payments

View Answer

D. Balance of Payments

The ________ is composed of capital account and current account.

A. Bill of credit

B. Barrier of Payments

C. Bill of Payments

D. Balance of Payments

View Answer

D. Balance of Payments

The full form of UNCTAD is ______

A. United Nations Conference on Tariff and Duties

B. United Nations Committee on Trade and Development

C. United Nations Conference on Trade and Development

D. United Nations Council on Tariff and Development

View Answer

C. United Nations Conference on Trade and Development

MCQs on International Trade Blocks

____ is a group of countries agree to abolish all trade restrictionsand barriers.

A. Common market

B. Economic Union

C. Custom Union

D. Free Trade Area

View Answer

D. Free Trade Area

EU stands for _____

A. Export Union

B. European Union

C. EXIM Union

D. Export Unit

View Answer

B. European Union

The abbreviation SAARC stands for _______

A. South American Association for Regional Cooperation

B. South African Association for Regional Cooperation

C. South ASEAN Association for Regional Cooperation

D. South Asian Association for Regional Cooperation

View Answer

D. South Asian Association for Regional Cooperation

The full form of WTO is __________

A. World Tariff Organization

B. World Trade Organization

C. Western Trade Organization

D. World Transport Organization

View Answer

B. World Trade Organization

________was replaced by WTO on January 1, 1995.

A. NAFTA

B. IMF

C. IRDB

D. GATT

View Answer

D. GATT

In International Trade, Full form of NAFTA is ___________.

A. National American Free Trade Agreement

B. North Asian Free Trade Agreement

C. New Anti-Tariff Free Trade Agreement

D. North American Free Trade Agreement

View Answer

D. North American Free Trade Agreement

AFTA is ___________.

A. ASEAN Free Trade Area

B. American Free Trade Area

C. Asian Free Trade Area

D. Agreement for Free Trade Area

View Answer

A. ASEAN Free Trade Area

ASEAN stands for ___________.

A. The Association of Southeast American Nations

B. The Association of Southeast Asian Nations

C. The Agreement of Southeast American Nations

D. The Agreement of Southeast Asian Nations

View Answer

B. The Association of Southeast Asian Nations

__________was established by a multilateral treaty of 23 countries in 1947.

A. WTO

B. UN

C. GATT

D. NAFTA

View Answer

C. GATT (The General Agreement on Tariffs and Trade)

In International Trade, IMF stands for ___________.

A. International Monetary Fund

B. International Money Fund

C. International Market Fund

D. International Monetary Firm

View Answer

A. International Monetary Fund

MCQs On Foreign Trade

An import tariff is a tax or duty levied on ___________ commodities.

A. Imported

B. Exported

C. Transported

D. Both A & B

View Answer

A. Imported

An _____________ is a tax or duty levied on exported commodities.

A. Import Tariff

B. Export Tariff

C. Transport Tariff

D. Free Trade Tariff (FTT)

View Answer

B. Export Tariff

__________refers to purchase of goods from a foreign country.

A. Foreign Trade

B. Export Trade

C. Import Trade

D. EXIM Trade

View Answer

C. Import Trade

_______is a fixed percentage on the value of the traded commodity.

A. Anti dumping duty

B. Specific tariff

C. Ad Valorem tariff

D. A compound tariff

View Answer

C. Ad Valorem tariff

In most countries, foreign trade represents a significant share of ______

A. EXIM

B. FDI

C. Income Per Capita

D. GDP

View Answer

D. GDP

Cash grants, loans at low rate and tax holidays are examples of ______.

A. Quotas

B. Tarifs

C. Subsidies

D. Discounts

View Answer

C. Subsidies

_________refers to the sale of goods to a foreign country.

A. Foreign Trade

B. Export Trade

C. Import Trade

D. EXIM Trade

View Answer

B. Export Trade

________is a combination of an ad valorem and specific tariff.

A. Anti dumping tariff

B. Specified Valorem Tariff

C. EXIM Tariff

D. A compound tariff

View Answer

D. A compound tariff

Foreign trade is an exchange of capital, goods, and services across _________ borders or territories

A. Intranational

B. National

C. International

D. Both A & C

View Answer

C. International

_______ refers to goods imported from one country and are exported to another country.

A. Third Party Trade

B. Entrepot trade

C. Export Trade

D. EXIM Trade

View Answer

B. Entrepot trade

Multiple Choice Questions on International Trade Theory

__________ try to explain why trade takes place between countries.

A. International Trade Firms

B. International Trade Theories

C. International Trade Blocks

D. IBRD

View Answer

B. International Trade Theories

Trade theories are classified into ______ trade theories and modern trade theories.

A. Regional

B. Classical

C. Local

D. Ancient

View Answer

B. Classical

_____ is the oldest trade theory.

A. Comparative Cost Advantage Theory

B. Hecksher Ohlin Theory

C. Product Life Cycle Theory

D. Theory of mercantilism

View Answer

D. Theory of mercantilism

_______ argues that countries enter into trade to earn gold and silver,

A. Theory of mercantilism

B. Theory of absolute advantage

C. Product Life Cycle Theory

D. Hecksher Ohlin Theory

View Answer

A. Theory of mercantilism

______ suggests that each country should specialize in producing only those goods which it can produce efficiently.

A. Theory of mercantilism

B. Theory of absolute advantage

C. Product Life Cycle Theory

D. Hecksher Ohlin Theory

View Answer

B. Theory of absolute advantage

Theory of absolute advantage is propagated by ______.

A. Philip Kotler

B. Adam Smith

C. Peter Drucker

D. David Ricardo

View Answer

B. Adam Smith

Theory of comparative advantage was given by ______

A. Philip Kotler

B. Adam Smith

C. Peter Drucker

D. David Ricardo

View Answer

D. David Ricardo

_________ stresses on the ‘relative cost difference’ rather than ‘absolute cost difference’ between the goods as the basis for carrying out trade.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

B. Theory of comparative advantage

Factor endowments theory of international trade is also known as _______

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

C. Hecksher Ohlin Theory

________ advocates that a country should focus and specialize in the production of goods that it can produce relatively at a lower cost than other countries.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

B. Theory of comparative advantage

______ explains that the countries acquire comparative advantages due to differences in the national factor endowments like land, labour and capital.

A. Theory of absolute advantage

B. Theory of comparative advantage

C. Hecksher Ohlin Theory

D. Theory of mercantilism

View Answer

C. Hecksher Ohlin Theory

International product life cycle theory was given by ______.

A. Raymond Vernon

B. David Ricardo

C. Michael Porter

D. Adam Smith

View Answer

A. Raymond Vernon

National competitive advantage also called as_____.

A. Gold Model

B. Silver Model

C. Diamond Model

D. Platinum Model

View Answer

C. Diamond Model

According to ‘New Trade Theory’ a firm acquires export competitiveness due to _______.

A. Specialization and economies of scale

B. Being the first mover in the market

C. Government support

D. All of the above

View Answer

D. All of the above

National competitive advantage theory of international trade was given by_____

A. Raymond Vernon

B. David Ricardo

C. Michael Porter

D. Adam Smith

View Answer

A. Raymond Vernon

This is all about MCQ on International Trade with solutions.

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