All Free International Relations MCQs with Answers

• A. Neorealism
• B. Liberalism
• C. Keynesian economics
• D. Mercantilism

Explanation: Mercantilism views international economic exchange as competitive and potentially conflictual, with states seeking trade advantages and…

• A. business leaders set production quotas and report them to government, which holds them accountable
• B. government officials set prices
• C. supply and demand are key indicators of prices and production levels
• D. all of these are the case: government officials set prices; business leaders set production quotes and report them to government; and supply and demand are key indicators of prices and production levels

Explanation: In a centrally planned economy, government authorities determine prices and production targets instead of leaving them mainly to market…

• A. plutocracy
• B. autarky
• C. monopoly
• D. oligopolyCompare Local Schools

Explanation: An oligopoly exists when a market is dominated by a small number of large sellers, such as major airlines or automobile producers.

• A. International Trade Commission
• B. Commerce Department
• C. Fair Trade Council
• D. House Commerce Committee

Explanation: The International Trade Commission assesses whether imports have caused injury to U.S.

• A. start-up firm
• B. service industry
• C. venture capital firm
• D. infant industrySend Money Overseas

Explanation: An infant industry is a new domestic industry competing with mature foreign industries and therefore seeking temporary government…

• A. gold or silver bullion
• B. petrodollars
• C. money with a fixed exchange rate
• D. money that can be readily converted to leading world currencies

Explanation: Hard currency is readily accepted and easily exchanged for major world currencies, usually because it comes from a stable economy.

• A. consumer economics
• B. Freedman economics
• C. Keynesian economics
• D. comparative advantageTake Economics Courses

Explanation: Comparative advantage explains why countries specialize according to their relative efficiency in producing different goods, based on…

• A. buying stocks and bonds
• B. lowering tariff barriers
• C. paying subsidies
• D. building a factory

Explanation: Portfolio investment means purchasing financial assets such as stocks or bonds without acquiring direct managerial control of a foreign…

• A. source state
• B. host state
• C. incorporated country
• D. home country

Explanation: The home country is the state where a multinational corporation is headquartered or based.

• A. government transactions
• B. the capital account
• C. capital flows
• D. the current account

Explanation: Capital flows are movements of investment money into and out of a country, including foreign direct and portfolio investment.

• A. Latin America
• B. G-8 states
• C. Japan
• D. Africa

Explanation: Most multinational corporations have historically been headquartered in the wealthy industrial economies grouped as the G-8, where…

• A. regulatory commission
• B. central bank
• C. fiscal policy
• D. currency policy

Explanation: A central bank manages the money supply and monetary policy, seeking to protect the currency's value and control inflation.

• A. Bank of America
• B. Ameri bank
• C. First National Bank of America
• D. Federal Reserve

Explanation: The Federal Reserve System, commonly called the Fed, is the central bank of the United States.

• A. There is no financial inventive to abide by the sanctions
• B. Broad multilateral support for international sanctions usually inspires the target of the sanctions to act against them
• C. If one state tries to use economic means of leverage to influence another, other states are damaged economically
• 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

Explanation: Sanctions can harm the sender economically because refusing mutually beneficial trade may impose costs on its own firms and consumers.

• A. International Monetary Fund
• B. All these answers are correct
• C. World Bank
• D. World Exchange Organization

Explanation: The International Monetary Fund coordinates monetary cooperation, supports balance-of-payments stability, and maintains important…

• A. Portfolio investment
• B. Fiduciary investment
• C. Foreign direct investment
• D. Currency investment

Explanation: Foreign direct investment involves a lasting ownership or controlling interest in productive assets such as factories, businesses, or…

• A. interdependence
• B. state-sponsored sanctions
• C. self-reliance
• D. import reliant

Explanation: Autarky means seeking economic self-sufficiency and relying as little as possible on external trade.

• A. revaluation
• B. reduction
• C. restructuring
• D. devaluation

Explanation: Devaluation is an official reduction in a currency's value under a fixed or managed exchange-rate system.

• A. hard currency reserves
• B. homes
• C. factories
• D. None of these answers is correctTry Prep Courses

Explanation: Standing wealth refers to relatively fixed physical assets such as homes and factories, whereas hard-currency reserves are liquid…

• A. a tariff
• B. a surcharge
• C. a subsidy
• D. a severance taxCompare Local Schools

Explanation: A tariff is a tax charged on imported goods, usually to raise revenue or protect domestic producers.