Quiz: Test Your Knowledge Of International Trade Terms!

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Questions: 15 | Attempts: 278 | Updated: Jul 4, 2024

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Quiz: Test Your Knowledge Of International Trade Terms! - Quiz

Test your knowledge of international trade terms with this engaging International Trade Terms Quiz! Challenge yourself with these interesting multiple-choice questions covering essential concepts and terminology related to global trade.

From trade surpluses and deficits to INCO terms and trade remedies, this quiz will assess your understanding of the intricacies of international commerce. Choose from four options for each question and find out how well-versed you are in the world of international trade.

Whether you're a student, professional, or just curious about international economics, this International Trade Terms Quiz offers an enjoyable way to test and expand your knowledge. Explore the fascinating Read morerealm of international trade terms and see how much you know!

Questions and Answers

1.

What is the term for a tax imposed on imported goods?
- A.
  
  Import duty
- B.
  
  Import tariff
- C.
  
  Export tax
- D.
  
  Import quota
Correct Answer
B. Import tariff

Explanation
Tariffs are taxes on imports to protect domestic industries and raise revenue for the government.

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2.

Which term refers to the total value of a country's exports minus imports?
- A.
  
  Trade surplus
- B.
  
  Balance of trade
- C.
  
  Net exports
- D.
  
  Trade barrier
Correct Answer
C. Net exports

Explanation
Net exports represent the value of goods or services exported minus those imported by a country during a specific period.

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3.

What is the exchange of goods and services between countries without using currency?
- A.
  
  Barter trade
- B.
  
  Countertrade
- C.
  
  Bilateral trade
- D.
  
  Foreign exchange
Correct Answer
A. Barter trade

Explanation
In barter trade, goods and services are exchanged directly without involving currency.

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4.

Which agreement promotes free trade by reducing tariffs and trade barriers?
- A.
  
  NAFTA
- B.
  
  The General Agreement on Tariffs and Trade (GATT)
- C.
  
  OPEC (Oil Producing Exporting Countries)
- D.
  
  EU (European Union)
Correct Answer
B. The General Agreement on Tariffs and Trade (GATT)

Explanation
The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.

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5.

The document that provides detailed information about a shipment is called:
- A.
  
  An air waybill (AWB)
- B.
  
  Certificate of origin (CO)
- C.
  
  Proforma invoice (PI)
- D.
  
  Shipping manifest
Correct Answer
A. An air waybill (AWB)

Explanation
An air waybill (AWB) is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked.

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6.

What term describes a situation where a country can produce a good more efficiently and at a lower cost?
- A.
  
  Absolute advantage
- B.
  
  Comparative advantage
- C.
  
  Balance of trade
- D.
  
  Terms of trade
Correct Answer
A. Absolute advantage

Explanation
Absolute advantage describes a situation where a country can produce a good more efficiently and at a lower cost than another country. This concept, introduced by Adam Smith, refers to the superior production capability of a country in terms of using fewer resources to produce a particular good.

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7.

What does FOB stand for in international trade?
- A.
  
  Free on Board
- B.
  
  Freight on Board
- C.
  
  Forward on Board
- D.
  
  Free of Brokerage
Correct Answer
A. Free on Board

Explanation
FOB indicates that the seller is responsible for the cost and risk of the goods until they are loaded on the vessel.

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8.

Which trade term indicates that the seller is responsible for all costs and risks until the goods reach the buyer's location?
- A.
  
  EXW (Ex Works)
- B.
  
  CIF (Cost, Insurance, Freight)
- C.
  
  Delivered-at-place (DAP)
- D.
  
  FCA (Free Carrier)
Correct Answer
C. Delivered-at-place (DAP)

Explanation
Delivered-at-place (DAP) refers to an arrangement wherein the seller covers the costs and takes on the risks of moving product to the buyer's location.

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9.

The WTO dispute settlement system can authorize the use of retaliatory measures, also known as:
- A.
  
  Trade sanctions
- B.
  
  Trade remedies
- C.
  
  Trade embargoes
- D.
  
  Trade barriers
Correct Answer
A. Trade sanctions

Explanation
Trade sanctions can be authorized as retaliation against non-compliance with trade agreements.

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10.

In international trade, what is a voluntary export restriction imposed by the exporting country?
- A.
  
  Trade embargo
- B.
  
  Trade subsidy
- C.
  
  Countervailing duty
- D.
  
  Export quota
Correct Answer
B. Trade subsidy

Explanation
A trade subsidy is a financial assistance given to exporters to make their products more competitive.

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11.

What term refers to the minimum price set by the government for certain imported goods?
- A.
  
  Quota
- B.
  
  Subsidy
- C.
  
  Price controls
- D.
  
  Trade surplus
Correct Answer
C. Price controls

Explanation
A price controls is a minimum price set by the government to support the domestic market and producers.

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12.

What is a trade arrangement where a company allows another company to use its intellectual property in exchange for a fee?
- A.
  
  Licensing
- B.
  
  Franchising
- C.
  
  Outsourcing
- D.
  
  Countertrade
Correct Answer
A. Licensing

Explanation
A licensing agreement allows one party (the licensee) to use and/or earn revenue from the property of the owner (the licensor). Licensing agreements generate revenues, called royalties, earned by a company for allowing its copyrighted or patented material to be used by another company.

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13.

What does GATT stand for in the context of international trade?
- A.
  
  General Agreement on Tariffs and Trade
- B.
  
  Global Association of Trade and Treaties
- C.
  
  Group of All Trade Transactions
- D.
  
  General Agreement on Trade and Taxes
Correct Answer
A. General Agreement on Tariffs and Trade

Explanation
GATT aimed to promote international trade by reducing trade barriers and establishing rules for trade.

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14.

Which term describes a tax or duty imposed on exports by the exporting country?
- A.
  
  Export duty
- B.
  
  Export tariff
- C.
  
  Import tax
- D.
  
  Import duty
Correct Answer
A. Export duty

Explanation
Export duty is a tax or duty imposed on goods leaving a country and is paid by the exporter.

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15.

The trade term "INCOTERMS" is associated with which aspect of international trade?
- A.
  
  Customs valuation
- B.
  
  Contract enforcement
- C.
  
  Terms of delivery
- D.
  
  Payment methods
Correct Answer
C. Terms of delivery

Explanation
INCOTERMS define the responsibilities and obligations of buyers and sellers regarding the delivery of goods.

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Current Version
Jul 04, 2024

Quiz Edited by
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Aug 01, 2023

Quiz Created by
Smriti Singh

Quiz: Test Your Knowledge Of International Trade Terms!

What is the term for a tax imposed on imported goods?

Which term refers to the total value of a country's exports minus imports?

What is the exchange of goods and services between countries without using currency?

Which agreement promotes free trade by reducing tariffs and trade barriers?

The document that provides detailed information about a shipment is called:

What term describes a situation where a country can produce a good more efficiently and at a lower cost?

What does FOB stand for in international trade?

Which trade term indicates that the seller is responsible for all costs and risks until the goods reach the buyer's location?

The WTO dispute settlement system can authorize the use of retaliatory measures, also known as:

In international trade, what is a voluntary export restriction imposed by the exporting country?

What term refers to the minimum price set by the government for certain imported goods?

What is a trade arrangement where a company allows another company to use its intellectual property in exchange for a fee?

What does GATT stand for in the context of international trade?

Which term describes a tax or duty imposed on exports by the exporting country?

The trade term "INCOTERMS" is associated with which aspect of international trade?