C211 ECON 5000
Global Economics for Managers
Comprehensive FA Review (Qns & Ans)
2025
1. Which of the following best describes the concept of
comparative advantage in international trade?
- A) A country can produce a good with fewer resources than
another country.
- B) A country has absolute superiority in the production of all
goods.
- C) A country can produce a good at a lower opportunity cost
than another country.
- D) A country imposes tariffs to protect its domestic industries.
©/2025
, - ANS: C) A country can produce a good at a lower
opportunity cost than another country.
- Rationale: Comparative advantage refers to the ability of a
country to produce a good at a lower opportunity cost compared
to another country, leading to more efficient allocation of
resources and benefits from trade.
2. What is the primary purpose of the World Trade Organization
(WTO)?
- A) To impose sanctions on non-compliant countries
- B) To resolve trade disputes and enforce international trade
agreements
- C) To manage global currency exchange rates
- D) To provide financial aid to developing countries
- ANS: B) To resolve trade disputes and enforce international
trade agreements.
- Rationale: The WTO aims to facilitate smooth international
trade by resolving disputes, enforcing trade agreements, and
promoting fair competition among member countries.
Fill-in-the-Blank Questions
©/2025
,3. The __________ theory suggests that countries should
specialize in the production of goods for which they have a
comparative advantage.
- ANS: Heckscher-Ohlin
- Rationale: The Heckscher-Ohlin theory suggests that
countries should specialize in producing goods that utilize their
abundant resources efficiently, based on their comparative
advantage.
4. __________ is the difference between a country's exports and
imports of goods and services.
- ANS: Trade balance
- Rationale: The trade balance measures the difference
between the value of a country's exports and imports, indicating
whether a country has a trade surplus or deficit.
True/False Questions
5. True or False: Tariffs are a type of non-tariff barrier used to
restrict international trade.
- ANS: False
- Rationale: Tariffs are taxes imposed on imported goods,
whereas non-tariff barriers include measures such as quotas,
embargoes, and regulatory restrictions that limit international
trade.
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, 6. True or False: Exchange rate fluctuations can impact the
competitiveness of a country's exports.
- ANS: True
- Rationale: Exchange rate fluctuations can affect the relative
prices of goods and services, influencing the competitiveness of a
country's exports in global markets.
Multiple Response Questions
7. Which of the following are potential benefits of globalization
for healthcare organizations? (Select all that apply)
- A) Access to a larger patient population
- B) Increased costs of healthcare delivery
- C) Opportunities for collaboration and knowledge sharing
- D) Improved access to medical technologies
- ANS: A) Access to a larger patient population, C)
Opportunities for collaboration and knowledge sharing, D)
Improved access to medical technologies.
- Rationale: Globalization can provide healthcare
organizations with access to a larger patient population,
opportunities for collaboration and knowledge sharing, and
improved access to medical technologies, enhancing the overall
quality and reach of healthcare services.
©/2025
Global Economics for Managers
Comprehensive FA Review (Qns & Ans)
2025
1. Which of the following best describes the concept of
comparative advantage in international trade?
- A) A country can produce a good with fewer resources than
another country.
- B) A country has absolute superiority in the production of all
goods.
- C) A country can produce a good at a lower opportunity cost
than another country.
- D) A country imposes tariffs to protect its domestic industries.
©/2025
, - ANS: C) A country can produce a good at a lower
opportunity cost than another country.
- Rationale: Comparative advantage refers to the ability of a
country to produce a good at a lower opportunity cost compared
to another country, leading to more efficient allocation of
resources and benefits from trade.
2. What is the primary purpose of the World Trade Organization
(WTO)?
- A) To impose sanctions on non-compliant countries
- B) To resolve trade disputes and enforce international trade
agreements
- C) To manage global currency exchange rates
- D) To provide financial aid to developing countries
- ANS: B) To resolve trade disputes and enforce international
trade agreements.
- Rationale: The WTO aims to facilitate smooth international
trade by resolving disputes, enforcing trade agreements, and
promoting fair competition among member countries.
Fill-in-the-Blank Questions
©/2025
,3. The __________ theory suggests that countries should
specialize in the production of goods for which they have a
comparative advantage.
- ANS: Heckscher-Ohlin
- Rationale: The Heckscher-Ohlin theory suggests that
countries should specialize in producing goods that utilize their
abundant resources efficiently, based on their comparative
advantage.
4. __________ is the difference between a country's exports and
imports of goods and services.
- ANS: Trade balance
- Rationale: The trade balance measures the difference
between the value of a country's exports and imports, indicating
whether a country has a trade surplus or deficit.
True/False Questions
5. True or False: Tariffs are a type of non-tariff barrier used to
restrict international trade.
- ANS: False
- Rationale: Tariffs are taxes imposed on imported goods,
whereas non-tariff barriers include measures such as quotas,
embargoes, and regulatory restrictions that limit international
trade.
©/2025
, 6. True or False: Exchange rate fluctuations can impact the
competitiveness of a country's exports.
- ANS: True
- Rationale: Exchange rate fluctuations can affect the relative
prices of goods and services, influencing the competitiveness of a
country's exports in global markets.
Multiple Response Questions
7. Which of the following are potential benefits of globalization
for healthcare organizations? (Select all that apply)
- A) Access to a larger patient population
- B) Increased costs of healthcare delivery
- C) Opportunities for collaboration and knowledge sharing
- D) Improved access to medical technologies
- ANS: A) Access to a larger patient population, C)
Opportunities for collaboration and knowledge sharing, D)
Improved access to medical technologies.
- Rationale: Globalization can provide healthcare
organizations with access to a larger patient population,
opportunities for collaboration and knowledge sharing, and
improved access to medical technologies, enhancing the overall
quality and reach of healthcare services.
©/2025
