Reasons For International Trade - SS3 Economics Past Questions & Answers - page 1

1

What is one of the main reasons for international trade?

A

Access to a wider variety of goods and services

B

Promotion of domestic industries

 

C

Increase in import taxes

D

Reduction in international cooperation

CORRECT OPTION: a
2

What does comparative advantage refer to?

A

 When countries produce only what they need

B

When countries specialize in the production of goods they are good at producing

C

When countries ban imports to protect their domestic industries

 

D

When countries compete for the same resources

CORRECT OPTION: b
3

How can international trade lead to lower prices for consumers?

A

By reducing competition

B

By increasing import taxes

C

By increasing production costs

D

By increasing competition and economies of scale

 

CORRECT OPTION: d
4

How can international trade promote peaceful relations between countries?

A

By fostering mutual interdependence

B

By reducing the need for negotiations

C

By increasing competition

 

D

By increasing import taxes

CORRECT OPTION: a
5

What can increased economic growth lead to for countries?

A

Reduced employment

B

Reduced investment

C

Increased employment, foreign exchange and investment

 

D

Increased taxes

CORRECT OPTION: c
6

What is one of the benefits of international trade for consumers?

 

Access to a wider variety of goods and services at competitive prices.

7

How can international trade promote economic growth for countries?

 

International trade can increase employment, generate foreign exchange, and stimulate investment.

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