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Economics (CBSE (UGC) NET)

International trade theory

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Questions

Question 1 Multiple Choice (Single Answer)

Which of the following economists made the first systematic study of factor-intensity reversals based on the constant elasticity of substitution (C. E. S.) production function?

  1. Stopler-Samuelson
  2. Minhas
  3. Rybczynski
  4. Lary
  5. Leontief
Question 2 Multiple Choice (Single Answer)

If the term of trade of country A is 5, then what will be the term of trade of country B?

  1. 4
  2. 5
  3. 2
  4. 1/10
  5. 1/5
Question 3 Multiple Choice (Single Answer)

Which of the following assumptions is not associated with Stopler-Samuelson theorem?

  1. There is perfect competition in factor and commodity markets.
  2. Production functions of both commodities are linear and homogenous of degree one.
  3. There are two countries which trade with each other and analysis is geometrically based on both countries.
  4. These two commodities are produced with only two factors, labour and capital.
  5. The terms of trade between the two countries remain unchanged.
Question 4 Multiple Choice (Single Answer)

Assertion (A): Gains from trade are determined by terms of trade.
Reason (R): Gains from international trade are based on comparative differences in costs.

  1. Both (A) and (R) are true and (R) is the correct explanation of (A).
  2. Both (A) and (R) are true, but (R) is not the correct explanation of (A).
  3. (A) is true, but (R) is false.
  4. (A) is false, but (R) is true.
  5. Both (A) and (R) are false.
Question 5 Multiple Choice (Single Answer)

Which of the following economists has/have not given ideas about the concept of factor-price equalisation?

  1. Samuelson
  2. Lerner
  3. Kindleberger
  4. Edgeworth-Bowley
  5. Vernon
Question 6 Multiple Choice (Single Answer)

Which of the following economists has not tried to empirically test the theories of comparative costs?

  1. MacDougall
  2. Balassa
  3. Stern
  4. Leontief
  5. Bhagwati
Question 7 Multiple Choice (Single Answer)

Which of the following formulae measures the degree of export competitiveness?

  1. 1 - NPC/NPC
  2. 1 + NPC/NPC
  3. Pd/Pb
  4. Pb/Pd
  5. Pd = Pb
Question 8 Multiple Choice (Single Answer)

India imports machines and exports handicraft items. This kind of trade is explained by which of the following theories?

  1. Theory of Absolute Differences in Costs
  2. Theory of Comparative Differences in Costs
  3. Purchasing Power Parity theory
  4. The Heckscher-Ohlin theory
  5. Theory of Opportunity Costs
Question 9 Multiple Choice (Single Answer)

Productivity theory was developed by

  1. Adam Smith
  2. Ricardo
  3. Myint
  4. J. S. Mill
  5. Harberler
Question 10 Multiple Choice (Single Answer)

Which of the following formulae expresses Nominal Protection Co-efficient (NPC)?

  1. Pb/Pd
  2. Pd/Pb
  3. Pd = Pb
  4. 1 - Pb/Pd
  5. 1 + Pb/Pd
Question 11 Multiple Choice (Single Answer)

Which of the following assumptions is not related to the partial equilibrium approach of the Theory of Customs Union?

  1. There are two countries, called home country and partner country, which form the customs union.
  2. There is no other type of restriction.
  3. The customs union imposes a common external tariff.
  4. There is perfect competition in factor markets.
  5. There is balanced trade whereby exports equal imports in the home country.
Question 12 Multiple Choice (Single Answer)

India's export share in world trade in 2009 was

  1. 1.7%
  2. 1.3%
  3. 0.7%
  4. 1.0%
  5. 1.5%
Question 13 Multiple Choice (Multiple Answers)

Which of the following assumptions is not related to foreign trade multiplier?

  1. There is full employment in the domestic economy.
  2. There is direct link between domestic and foreign countries in exporting and importing goods.
  3. It is based on multiple exchange rate system.
  4. Government expenditure is constant.
  5. The multiplier is based on instantaneous process without time lags.
Question 14 Multiple Choice (Single Answer)

Which of the following factors caused the breakdown of Bretton Woods system?

(i) Built-in instability
(ii) Full of confidence
(iii) The tariff in dilemma
(iv) Lack of international liquidity
(v) Stabilising speculation

  1. Only (i) and (ii)
  2. Only (i), (iii) and (v)
  3. Only (ii), (iii) and (iv)
  4. Only (i), (ii) (iii), and (iv)
  5. Only (i), (iii) and (iv)
Question 15 Multiple Choice (Single Answer)

Which of the following assumptions is not related to Vanek's theory of Customs Union?

  1. There are two countries called home country and partner country, which form the customs union.
  2. Neither commodity is inferior in any country at any relative price or income level.
  3. Both countries trade with each other after the formation of the customs union.
  4. No tariff or obstacle to trade exists.
  5. There is free trade.
Question 16 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Stopler-Samuelson theorem (i) The effect of factor endowment changes on trade
2. Factor-price equalisation theory (ii) Partial factor-price equalisation
3. Ohlin (iii) Movements in commodity prices to individual rewards
4. Heckscher (iv) Movements in commodity prices to ratio of factor rewards
5. Rybczynski (v) Absense of complete factor-price equalisaton
  1. 1 - (iii), 2 - (v), 3 - (iv), 4 - (i), 5 - (ii)
  2. 1 - (iii), 2 - (iv), 3 - (ii), 4 - (v), 5 - (i)
  3. 1 - (iv), 2 - (iii), 3 - (v), 4 - (ii), 5 - (i)
  4. 1 - (iii), 2 - (iv), 3 - (v), 4 - (i), 5 - (ii)
  5. 1 - (iv), 2 - (iii), 3 - (i), 4 - (v), 5 - (ii)
Question 17 Multiple Choice (Single Answer)

Match the following.

 
Group - I Group - II
1. Production Effect (i) Mead
2. Consumption Effect (ii) Johnson
3. Production and Consumption Effect (iii) Lerner
4. Radiant of Tangency (iv) Viner
  1. 1 - (ii), 2 - (iii), 3 - (iv), 4 - (i)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (iv), 2 - (i), 3 - (ii), 4 - (iii)
  4. 1 - (iii), 2 - (i), 3 - (iv), 4 - (ii)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
Question 18 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Purchasing Power Parity theory (i) Dorrance
2. Income terms of trade (ii) Linder
3. Real cost terms of trade (iii) Gustav Cassel
4. Demand pattern (iv) Viner
  1. 1 - (i), 2 - (ii), 3 - (iii), 4 - (iv)
  2. 1 - (iii), 2 - (i), 3 - (iv), 4 - (ii)
  3. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
  4. 1 - (iii), 2 - (i), 3 - (ii), 4 - (iv)
  5. 1 - (i), 2 - (iii), 3 - (iv), 4 - (ii)
Question 19 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Partial Equilibrium Approach (i) Vanek
2. General Equilibrium Approach (ii) J. Bhagwati
3. The Theory of Economic Integration (iii) Viner
4. Customs Union and Welfare Improvement (iv) B. Balassa
  1. 1 - (ii), 2 - (iii), 3 - (iv), 4 - (i)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (i), 2 - (iii), 3 - (iv), 4 - (ii)
  4. 1 - (iii), 2 - (i), 3 - (iv), 4 - (ii)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
Question 20 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. J-curve effect (i) Sydney-Alexander
2. Indirect effect of money transfer (ii) Marshall-Lerner
3. Inter-commodity substitution (iii) Ohlin
4. Absorption approach (iv) Lipsey
  1. 1 - (ii), 2 - (iii), 3 - (iv), 4 - (i)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (i), 2 - (iii), 3 - (iv), 4 - (ii)
  4. 1 - (ii), 2 - (iii), 3 - (i), 4 - (iv)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
Question 21 Multiple Choice (Single Answer)

Match the following.

 
Group - I Group - II
1. Real Cost Terms of Trade (i) Tu = Tr . u
2. Utility Terms of Trade (ii) Td = Tc . Fx / Fm
3. Double Factoral Terms of Trade (iii) Ty = Tc . Qx
4. Income Terms of Trade (iv) Tr = Ts . Rx
  1. 1 - (i), 2 - (ii), 3 - (iii), 4 - (iv)
  2. 1 - (iii), 2 - (iv), 3 - (ii), 4 - (i)
  3. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
  4. 1 - (iv), 2 - (i), 3 - (ii), 4 - (iii)
  5. 1 - (iv), 2 - (i), 3 - (iii), 4 - (ii)
Question 22 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Protection and real wage (i) H. W. Singer
2. Distribution of gain between investing and borrowing countries (ii) W. M. Corden
3. Export gain from trade index (iii) Stopler-Samuelson
4. The structure of a tariff system and the effective protective rate (iv) A. H. Imlah
  1. 1 - (iii), 2 - (i), 3 - (iv), 4 - (ii)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (ii), 2 - (i), 3 - (iv), 4 - (iii)
  4. 1 - (iii), 2 - (ii), 3 - (iv), 4 - (i)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
Question 23 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Economic theory and western economic integration (i) C. P. Kindleberger
2. Economies of scale and customs union (ii) D. Salvatore
3. Theory and problems of integrational economics (iii) W. M. Corden
4. International money (iv) T. Scitovsky
  1. 1 - (ii), 2 - (iii), 3 - (iv), 4 - (i)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (iv), 2 - (i), 3 - (ii), 4 - (iii)
  4. 1 - (iii), 2 - (i), 3 - (iv), 4 - (ii)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
Question 24 Multiple Choice (Single Answer)

Match the following:

 
Group - I Group - II
1. Maastrich treaty (i) 1989
2. Baker plan (ii) 1988
3. Brady plan (iii) 1992
4. Toronto term (iv) 1985
  1. 1 - (ii), 2 - (iii), 3 - (iv), 4 - (i)
  2. 1 - (ii), 2 - (iv), 3 - (iii), 4 - (i)
  3. 1 - (iii), 2 - (iv), 3 - (i), 4 - (ii)
  4. 1 - (iii), 2 - (iv), 3 - (ii), 4 - (i)
  5. 1 - (iv), 2 - (iii), 3 - (ii), 4 - (i)
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