International Relations Mcqs Practice Test

Question 1

Almost all MNCs are based in:

Accepted Answer

B. G-8 states

Question 2

A _________ is responsible for maintaining the value of a state’s currency to the extent that it can by limiting the amount of money printed and avoiding inflation.

Accepted Answer

B. central bank

Question 3

What is the name of the U.S. central bank?

Accepted Answer

D. Federal Reserve

Question 4

Why is it difficult to apply and enforce sanctions in the international system?

Accepted Answer

D. Refusing to participate in mutually profitable economic trade often harms oneself more than the target of one’s actions, unless all other states follows suit

Question 5

What institution coordinates international currency exchange, the balance of international payments, and national accounts?

Accepted Answer

A. International Monetary Fund

Question 6

__________ involves tangible goods such cannot be traded and moved freely like paper investments.

Accepted Answer

C. Foreign direct investment

Question 7

“Autarky” is (are):

Accepted Answer

C. self-reliance

Question 8

A unilateral move to reduce the value of one’s own currency by changing a fixed or official exchange rate is known as:

Accepted Answer

D. devaluation

Question 9

Which of these is NOT a form of standing wealth?

Accepted Answer

A. hard currency reserves

Question 10

A tax imposed on certain types of imported goods is:

Accepted Answer

A. a tariff

Question 11

Which of these nations illustrates the problems with autarky?

Accepted Answer

A. China

Question 12

Apart from the WTO, most international trade is governed by more specific international agreements: bilateral trade agreements and:

Accepted Answer

C. regional trade agreements

Question 13

Devaluation of a stat’s currency:

Accepted Answer

B. causes a drop in demand for that currency

Question 14

If regional free-trade areas such as now exist in Europe and North America gain strength, and new ones arise,

Accepted Answer

D. the WTO may be weakened

Question 15

Keynesian economics advocates:

Accepted Answer

C. deficit spending to stimulate the economy

Question 16

Which of the following is NOT and attribute of the Special Drawing Right?

Accepted Answer

B. It can be owned by states or companies, but not by individuals

Question 17

Why are governments, even when acting together, at a disadvantage when intervening in international currency markets?

Accepted Answer

D. The control only a small fraction of the money moving on such markets

Question 18

In recent years, to balance its trade deficit, the United States has:

Accepted Answer

A. “exported” currency to other countries

Question 19

What are cross-border transactions?

Accepted Answer

A. Movement across borders of countries of goods, people, money, investments etc.

Question 20

What are transborder transactions?

Accepted Answer

D. All of the above