Trade Policies and Agreements MCQs - International Relations IR

What is the primary goal of trade policies?

A. To isolate a country from international markets
B. To promote and regulate international trade to benefit the national economy
C. To restrict international investments
D. To decrease the variety of imported goods
Answer: B
Which of the following agreements is designed to reduce tariffs and other trade barriers between member countries?

A. The Paris Agreement
B. The General Agreement on Tariffs and Trade (GATT)
C. The Kyoto Protocol
D. The North Atlantic Treaty
Answer: B
What does the term “tariff” refer to in international trade?

A. A subsidy for domestic industries
B. A tax imposed on imported goods
C. A ban on certain imports
D. A grant to foreign companies
Answer: B
Which of the following is a key objective of the World Trade Organization (WTO)?

A. To enforce environmental regulations
B. To promote international trade by reducing trade barriers and ensuring fair competition
C. To manage global financial markets
D. To regulate global climate change
Answer: B
What is “free trade”?

A. Trade that occurs without any government intervention or restrictions
B. Trade that involves high tariffs and quotas
C. Trade that is restricted to domestic markets only
D. Trade that is regulated by bilateral agreements
Answer: A
Which term describes a trade policy that imposes limits on the quantity of goods that can be imported?

A. Quota
B. Subsidy
C. Tariff
D. Dumping
Answer: A
What is “dumping” in the context of international trade?

A. Exporting goods at a price lower than the cost of production to gain market share
B. Imposing high tariffs on imported goods
C. Restricting the import of certain goods
D. Providing subsidies to domestic producers
Answer: A
Which trade agreement aims to eliminate tariffs and promote trade among its member countries in North America?

A. The European Union (EU)
B. The North American Free Trade Agreement (NAFTA)
C. The South Asian Association for Regional Cooperation (SAARC)
D. The African Union (AU)
Answer: B
What is the purpose of a “bilateral trade agreement”?

A. To create trade policies among multiple countries
B. To establish trade terms between two countries
C. To regulate global financial markets
D. To create environmental regulations
Answer: B
Which of the following is an example of a regional trade agreement?

A. The General Agreement on Tariffs and Trade (GATT)
B. The North Atlantic Treaty Organization (NATO)
C. The European Union (EU)
D. The International Monetary Fund (IMF)
Answer: C
What does “trade liberalization” involve?

A. Increasing trade barriers
B. Reducing or eliminating trade barriers and restrictions
C. Implementing quotas on imports
D. Increasing tariffs on exports
Answer: B
Which of the following agreements aims to address trade and investment issues among countries in the Asia-Pacific region?

A. The North American Free Trade Agreement (NAFTA)
B. The Trans-Pacific Partnership (TPP)
C. The European Union (EU)
D. The Association of Southeast Asian Nations (ASEAN)
Answer: B
What is a “trade deficit”?

A. When a country exports more than it imports
B. When a country imports more than it exports
C. When a country has balanced trade
D. When a country has no trade at all
Answer: B
What is “protectionism”?

A. A policy that promotes free trade and open markets
B. A policy aimed at protecting domestic industries from foreign competition through tariffs and quotas
C. A policy that reduces tariffs and trade barriers
D. A strategy to promote international cooperation
Answer: B
Which trade agreement replaced NAFTA in 2020?

A. The Trans-Pacific Partnership (TPP)
B. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
C. The United States-Mexico-Canada Agreement (USMCA)
D. The African Continental Free Trade Area (AfCFTA)
Answer: C
What is the “most-favored-nation” (MFN) principle in international trade?

A. A principle that allows countries to offer preferential trade terms to one country but not others
B. A principle that ensures a country treats all trading partners equally and does not discriminate
C. A principle that imposes high tariffs on foreign goods
D. A principle that creates regional trade barriers
Answer: B
What does the term “economic sanctions” refer to?

A. Measures imposed to encourage trade between countries
B. Restrictions or penalties imposed by one country or group of countries to influence another country’s behavior
C. Subsidies provided to domestic industries
D. Agreements to reduce trade barriers
Answer: B
Which organization is responsible for administering international trade rules and resolving trade disputes?

A. The International Monetary Fund (IMF)
B. The World Trade Organization (WTO)
C. The World Bank
D. The United Nations (UN)
Answer: B
What is “sectoral trade agreement”?

A. An agreement that covers trade across all sectors of the economy
B. An agreement focused on trade in specific sectors or industries
C. An agreement to limit trade to certain countries
D. An agreement that imposes tariffs on all imports
Answer: B
What is the purpose of “trade facilitation”?

A. To make international trade more difficult and complex
B. To streamline and simplify the processes involved in international trade
C. To increase trade barriers
D. To restrict trade to domestic markets
Answer: B
Which agreement was established to promote economic integration and trade among African countries?

A. The European Union (EU)
B. The African Continental Free Trade Area (AfCFTA)
C. The North American Free Trade Agreement (NAFTA)
D. The Association of Southeast Asian Nations (ASEAN)
Answer: B
What does “tariff escalation” refer to?

A. Reducing tariffs on all imported goods
B. Increasing tariffs on higher value-added products compared to raw materials
C. Removing tariffs on exports
D. Reducing tariffs on raw materials
Answer: B
Which term refers to a trade agreement that includes provisions on intellectual property rights?

A. A bilateral agreement
B. A regional agreement
C. A comprehensive trade agreement
D. A trade facilitation agreement
Answer: C
What is “trade policy review”?

A. A process of assessing the impact of domestic policies on international trade
B. A review of trade agreements between two countries
C. A system for evaluating the performance of regional trade organizations
D. A mechanism for reviewing and monitoring the trade policies of WTO member countries
Answer: D
What does “trade imbalance” mean?

A. Equal trade levels between imports and exports
B. A situation where the value of a country’s imports exceeds the value of its exports or vice versa
C. A balanced trade policy
D. An agreement to limit trade
Answer: B
Which of the following is a goal of “regional integration”?

A. To create economic barriers between neighboring countries
B. To enhance economic cooperation and reduce trade barriers within a specific region
C. To isolate regional markets from the global economy
D. To enforce global trade restrictions
Answer: B
What is “trade diversion”?

A. The shift of trade from a more efficient producer to a less efficient producer due to trade barriers
B. The increase in trade between countries with similar production capabilities
C. The removal of trade barriers
D. The creation of trade agreements between countries with similar economic conditions
Answer: A
Which agreement focuses on reducing trade barriers and promoting trade in the services sector?

A. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
B. The General Agreement on Trade in Services (GATS)
C. The Comprehensive Economic and Trade Agreement (CETA)
D. The Trade Facilitation Agreement (TFA)
Answer: B
What does “trade liberalization” aim to achieve?

A. The imposition of trade barriers to protect domestic industries
B. The removal of trade barriers to encourage free trade
C. The restriction of foreign investments
D. The creation of economic sanctions
Answer: B
Which of the following is a form of “non-tariff barrier”?

A. Quotas
B. Import duties
C. Export subsidies
D. Tariffs
Answer: A
What is the “doha development agenda” (DDA)?

A. A set of trade negotiations under the WTO aimed at improving trade conditions for developing countries
B. An agreement to limit trade between developed countries
C. A regional trade agreement among African nations
D. A policy to increase tariffs on developing countries’ goods
Answer: A
Which term describes the practice of countries engaging in reciprocal trade agreements to reduce tariffs and other trade barriers?

A. Multilateralism
B. Bilateralism
C. Protectionism
D. Isolationism
Answer: B
What is “trade adjustment assistance”?

A. Financial aid provided to domestic industries that are harmed by international trade
B. A program to reduce trade barriers
C. A mechanism for increasing tariffs on imports
D. An agreement to enhance trade with neighboring countries
Answer: A
Which agreement aims to reduce trade barriers and promote economic cooperation among countries in the Asia-Pacific region?

A. The Trans-Pacific Partnership (TPP)
B. The North American Free Trade Agreement (NAFTA)
C. The European Economic Area (EEA)
D. The African Union (AU)
Answer: A
What does “trade-based investment” refer to?

A. Investments made with the aim of creating new trade barriers
B. Investments that are linked to or motivated by trade activities and policies
C. Investments that restrict international trade
D. Investments that solely focus on domestic markets
Answer: B
What is “trade facilitation”?

A. The creation of trade barriers to protect domestic industries
B. The simplification and harmonization of trade procedures to make international trade easier
C. The imposition of quotas on imports
D. The increase of tariffs on foreign goods
Answer: B
Which term describes a situation where a country imposes tariffs or quotas on imports to protect its domestic industries?

A. Economic globalization
B. Trade protectionism
C. Free trade
D. Trade liberalization
Answer: B
What does the term “trade agreement” encompass?

A. An agreement that only addresses tariffs and quotas
B. A contract between countries outlining the terms of trade, including tariffs, quotas, and other trade rules
C. An agreement that only deals with environmental issues
D. A policy to restrict foreign investments
Answer: B
Which of the following is a benefit of “trade agreements”?

A. Increased trade barriers
B. Greater access to foreign markets and resources
C. Restriction of international trade
D. Imposition of higher tariffs
Answer: B
What is “trade diversion”?

A. The reduction of trade barriers to promote international trade
B. The shift of trade from a low-cost producer to a higher-cost producer due to preferential trade agreements
C. The increase in trade with non-member countries
D. The elimination of trade barriers
Answer: B
Which agreement was established to promote economic cooperation and trade among countries in the Middle East and North Africa?

A. The European Union (EU)
B. The Arab Free Trade Area (AFTA)
C. The North American Free Trade Agreement (NAFTA)
D. The Association of Southeast Asian Nations (ASEAN)
Answer: B
What does “trade liberalization” often lead to?

A. Reduced market access
B. Increased economic efficiency and growth
C. Greater trade barriers
D. Increased protectionism
Answer: B
Which organization administers international trade agreements and provides a forum for negotiating trade disputes?

A. The World Trade Organization (WTO)
B. The International Monetary Fund (IMF)
C. The World Bank
D. The United Nations (UN)
Answer: A
What is “economic integration”?

A. The process of creating barriers between economies
B. The process of reducing trade barriers and increasing economic cooperation among countries
C. The establishment of separate national economies
D. The isolation of economies from global markets
Answer: B
Which agreement aims to enhance trade and economic cooperation among countries in Latin America?

A. The North American Free Trade Agreement (NAFTA)
B. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
C. The Southern Common Market (Mercosur)
D. The European Union (EU)
Answer: C
What is the primary purpose of a “trade bloc”?

A. To promote economic isolation among member countries
B. To enhance trade and economic cooperation among member countries through reduced tariffs and trade barriers
C. To restrict international trade
D. To create trade barriers between member countries
Answer: B
What does “trade integration” typically involve?

A. Increasing trade barriers between countries
B. Harmonizing and reducing trade policies and regulations to facilitate trade among countries
C. Imposing higher tariffs on imports
D. Restricting trade to domestic markets
Answer: B
What is a “customs union”?

A. An agreement among countries to harmonize their tariffs and trade policies and remove trade barriers among themselves
B. An agreement to impose tariffs on imports from non-member countries
C. A trade agreement that only addresses environmental issues
D. A policy to restrict foreign investments
Answer: A
Which of the following is a feature of a “common market”?

A. The elimination of tariffs among member countries and the creation of a common external tariff
B. The imposition of quotas on imports
C. The restriction of trade to domestic markets
D. The creation of trade barriers among member countries
Answer: A
What does “economic globalization” refer to?

A. The process of creating regional trade barriers
B. The increasing interconnectedness of national economies through trade, investment, and financial flows
C. The isolation of national economies from global markets
D. The reduction of international trade
Answer: B

Trade Policies and Agreements MCQs – International Relations IR

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