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WAEC questions for "Economics :: International Trade and Balance of Payments"
Q1

Terms of trade is defined as the

A

trade between one country and another

B

relationship between country's receipt from others and payment to others

C

rate at which a country's exports exchange for imports

D

difference between the value of exports and imports

E
Q2

The terms of trade is described as unfavourable when

A

the price of imports rise relative to those of exports

B

the price of exports rise relative to those of imports

C

the net income from aboard does not change

D

the value of exports exceeds those of imports

E
Q3

Expenditure by foreign tourists in a country will be recorded as 

A

invisible exports

B

official transfers

C

transfer income

D

visible exports

E
Q4

One major aim of a cartel is to

A

increase production

B

regulate output through quota system

C

have a joint account

D

share profits equally

E
Q5

Trade among nations is desirable because it

A

enables people in a country to know those in other countries

B

makes it possible for people in a country to enjoy the goods and services produced in other countries

C

enables residents in a country to understand the language of residents of the other countries

D

makes it possible for a country to have the currencies of the other countries

E
Q6

Invisible trade refers to trade in

A

services

B

goods and services

C

tangible goods

D

crude oil

E
Q7

Balance of payment surplus implies that the value of the country's

A

export exceeds its imports

B

imports exceeds its exports

C

exports is equal to its imports

D

terms of trade is constant

E
Q8

International trade depends on the concept of

A

marginal cost advantage

B

comparative cost disadvantage

C

comparative cost advantage

D

absolute cost

E
Q9

One advantage of international trade is that

A

countries depend on each other

B

it introduces variation in prices

C

it increases demand for foreign goods

D

it makes variety of goods available

E
Q10

The practice of selling goods overseas and below the cost production is known as 

A

retailing

B

dumping

C

internal trade

D

advertising

E
Q11

A summary of all the receipts and payments of a country in international transactions is called

A

terms of trade

B

balance of payment

C

balance of payment adjustment

D

capital account

E
Q12

Which of the following countries export cocoa?

A

Liberia and The Gambia

B

Ghana and Sierra Leone

C

Nigeria and Ghana

D

Sierra Leone and Nigeria

E
Q13

Which of the following are examples of transfer payment?

A

Gifts and donations

B

Rents and rates

C

Profits and dividends

D

Internal and external debts

E
Q14

The formula Index of export prices / Index of import prices  x 100 is used to measure the

A

volume of trade between countries

B

direction of international trade

C

commodity terms of trade

D

volume of imports

E
Q15

In an attempt to correct a deficit balance of payments, a country may decide to increase

A

domestic production

B

imports

C

domestic expenditure

D

tax on infant industries

E
Q16

Which of the following is an objective of economic integration?

A

Harmonization of cultural practices

B

Free movement of persons, goods and services

C

Payment if high tariffs

D

dumping of goods in less developed countries

E
Q17

When the value of a nation's exports is greater than its imports

A

a fovourable balance of trade exists

B

an unfavourable balance of payments exists

C

the net foreign trade is zero

D

inflation occurs

E
Q18

To improve the balance of payments position of West African countries, there must be

A

removal of barriers to importation of goods and services

B

increased rate of exportation of goods and services

C

increased domestic consumption of foreign produced goods

D

the development of the local market

E
Q19

The act of selling goods in foreign markets prices below those charged at home markets is called

A

exchange 

B

specialization

C

dumping

D

exporting

E
Q20

International trade is an application of the principle of

A

industrial production

B

mass production

C

regional production

D

comparative cost advantage

E
Q21

Trade among West African countries is poor because the

A

countries are self-sufficient

B

communication links are weak

C

number of banks is insufficient 

D

people are not enterprising 

E
Q22

Which of the following items is under the capital account of a balance of payment?

A

Repayment of foreign loans

B

Visible imports

C

Invisible exports

D

Cocoa exports

E
Q23

A surplus in the balance of payment should be used to

A

subsidize multinational companies

B

build infrastructure for friendly nations

C

make donation to developed countries

D

buy investments overseas

E
Q24

Invisible trade refers to trade in

A

services 

B

goods and services

C

tangible goods

D

crude oil

E
Q25

Which of the following is a part of capital account of the balance of payments?

A

Net investment from aboard

B

Import of machinery

C

Insurance

D

Transportation costs

E
Q26

International trade is based on the law of

A

absolute cost advantage

B

variable proportion

C

comparative cost advantage

D

mutual co-operation

E
Q27

Terms of trade is used to describe

A

the quality of exports

B

the direction of foreign trade

C

purchase on deferred payment basis

D

the rate at which exports exchange for imports

E
Q28

A nation's net export is negative when her

A

stock of goods is declining

B

depreciation exceeds investment

C

export is adjusted upwards

D

imports exceed exports

E
Q29

Deficit in the balance of payment is financed through

A

capital account

B

current account

C

invisible trade

D

visible trade

E
Q30

Balance of payments deficit can be corrected by

A

purchasing foreign asset

B

accumulating foreign reserves

C

export promotion measures

D

import promotion measures

E
Q31

The exchange of goods and services across different countries can be described as

A

bi-lateral trade

B

multilateral trade

C

national trade

D

home trade

E
Q32

Which of the following is a major barrier of international trade?

A

Religious differences amongst nations

B

Uneven distribution of population across the world

C

Educational imbalance between the developed and developing countries

D

ideological difference amongst nations

E
Q33
Balance of payment deficit implies that a country is
A
importing more than she is exporting
B
consuming less than she is producing
C
living below her means
D
more productive than others
E
Q34
Balance of trade is defined as the relation between
A
invisible imports and exports
B
visible and invisible exports
C
imports and exports services
D
visible exports and visible imports
E
Q35
Which of the following countries is the major trading partner of Nigeria?
A
Britain
B
Canada
C
Japan
D
Germany
E
China
Q36
The instruments used in many countries to restrict imports include
A
high tariffs
B
price index
C
excise duties
D
bank rate
E
subsidies
Q37
Which of the following constitute the largest exports of the developing countries to developed ones?
A
Raw materials
B
Finished consumer goods
C
Labour services
D
Arms and ammunition
E
Automobiles
Q38
Free Trade means
A
producers are free to determine their prices
B
market forces are allowed to determine prices
C
non-restriction of international trade
D
goods are to be sold free of charge
E
people are free to buy in foreign countries
Q39
Terms of trade is the
A
ratio of capital movements to export movements
B
ratio of import to short-term export
C
difference between export and imports
D
ratio of short-term movements to long-term movements
E
ratio of index of export prices to index of import prices
Q40
Tariff can be defined as a compulsory levy on
A
goods that are produced and consumed locally
B
foreign exchange earnings
C
imported but inferior goods
D
foreigners working in a country
E
imports and exports
Q41
International trade is different from internal trade because of the
A
manufactured goods involved
B
currency differentials
C
homogeneity of product
D
heterogeneity of product
E
uniformity of prices
Q42
Which of the following is not a visible item in international trade payments?
A
Payments for imported cars
B
Receipts from cocoa exports
C
Receipts from oil exports
D
Payments for steel imports
E
Payments to foreign shipping companies
Q43
Exchanging control is a weapon used in regulating
A
internal trade
B
stock exchange
C
foreign trade
D
barter trade
E
exchange of personal property
Q44
The current and capital accounts in Nigeria's balance of payments contain all the following items except
A
oil export
B
receipts for shipping services
C
cost of aviation
D
foreign investment
E
IMF's Standard Drawing Right (SDR)
Q45
Terms of trade simply means the price
A
ratio of import to export
B
ratio of export multiplied by import
C
ratio of export to import
D
ratio of export multiplied by price ratio of import
E
ratio of export minus price of import
Q46
Balance of trade can be defined as
A
the value of imports in relation to the value of a country's export
B
the price ratio of import as against the of exports
C
equality in the total receipts and payments of a country in a year
D
percentage value of imports over percentage value of exports
E
prices of exports versus price of imports
Q47
International trade take place because of differences in
A
production cost
B
language
C
government
D
currency
E
international boundary
Q48

The comparative cost of doctrine of international trade means specialization in production according to

A

absolute cost advantage

B

absolute cost disadvantage

C

comparative cost disadvantage

D

comparative cost advantage

E

the availability of labour

Q49

A disequilibrium in a country's balance of payment implies

A

that her imports exceeds her exports

B

an overall decifit or surplus in her current account and capital account

C

that her capital inflow exceeds her capital outflow

D

an overall deficit in its trade balance with other countries

E

that its export earnings exceed the cost of its imports

Q50

International trade is necessary mainly because

A

no country can live in economic isolation

B

different countries are endowed with the same natural and man-made resources

C

some countries have comparative cost advantage in the production of certain commodities

D

the world demand for and supply of various categories commodities is expanding very fast

E

countries want to build up their foreign reserves

Q51

Dumping in Economics means selling goods in a foreign market

A

at a price below that is received in the home market

B

at a price above that is received in the home market

C

at a price equal to the cost price in the market        

D

in order to encourage indigenous producers

E

at a price equal to the selling price in the home market

Q52

What is the correct term for this group of exports: tractors, television, components, drugs and cars?

A

current account items

B

visible exports

C

capital account items

D

invisible exports

E

visible imports

Q53

The two largest producers of crude oil in Nigeria are

A

Borno and Ondo states

B

Oyo and Bendel States

C

Kwara and Benue States

D

Rivers and Bendel States

E

Niger and Rivers States

Q54

Which of the following statements is true about the terms of trade?

A

Terms of trade shows the difference between the value of exports and imports

B

Terms of trade indicates the rate at which the exports exchange for imports

C

It is a ratio of the price index of exports to imports

D

It is usually expressed as a percentage

E

A rise in the price of exports relative to imports is an improvement

Q55

International trade and domestic trade are similar in all aspects except that

A

transportation by land, water and air is involved

B

goods are exchanged

C

services are exchanged

D

the same currency is used as medium of exchange

E

specialisation and increased consumption is encouraged

Q56

Which of the following roles is being played by the Organisation of Petroleum Exporting Countries (OPEC) with regards to Nigeria's crude oil?

A

Exploiting

B

Exploring

C

Refining

D

Marketing

E

Exporting